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S. Hrg. 113–120 

NOMINATION OF BRIAN C. DEESE 

HEARING 

BEFORE THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

NOMINATION OF BRIAN C. DEESE, TO BE DEPUTY DIRECTOR OF THE 

OFFICE OF MANAGEMENT AND BUDGET 

MAY 13, 2013 

Available via the World Wide Web: http://www.fdsys.gov/ 

Printed for the use of the 

Committee on Homeland Security and Governmental Affairs 

( 
(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

THOMAS R. CARPER, Delaware Chairman 

CARL LEVIN, Michigan 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

MARK BEGICH, Alaska 

TAMMY BALDWIN, Wisconsin 

HEIDI HEITKAMP, North Dakota 

TOM COBURN, Oklahoma 

JOHN MCCAIN, Arizona 

RON JOHNSON, Wisconsin 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

MICHAEL B. ENZI, Wyoming 

KELLY AYOTTE, New Hampshire 

RICHARD J. KESSLER, Staff Director 

JOHN P. KILVINGTON, Deputy Staff Director 

DEIRDRE G. ARMSTRONG, Professional Staff Member 

KRISTINE V. LAM, Professional Staff Member 

LAWRENCE B. NOVEY, Chief Counsel for Governmental Affairs 

TROY H. CRIBB, Chief Counsel for Governmental Affairs 

KEITH B. ASHDOWN, Minority Staff Director 

CHRISTOPHER J. BARKLEY, Minority Deputy Staff Director 

ANDREW C. DOCKHAM, Minority Chief Counsel 

TRINA D. SHIFFMAN, Chief Clerk 

LAURA W. KILBRIDE, Hearing Clerk 
(III) 

C O N T E N T S 

Opening statements: Page 

Senator Carper ................................................................................................. 1 

Senator Levin .................................................................................................... 4 

Prepared statements: 

Senator Carper ................................................................................................. 27 

Senator Coburn ................................................................................................. 30 

WITNESSES 

MONDAY, MAY 13, 2013 

Brian C. Deese, Nominee to Serve as Deputy Director, Office of Management 

and Budget 

Testimony .......................................................................................................... 4 

Prepared statement .......................................................................................... 32 

Biographical and financial information .......................................................... 34 

Responses to pre-hearing questions ................................................................ 53 

Letter from the Office of Government Ethics ................................................. 89 

(1) 

NOMINATION OF BRIAN C. DEESE 

MONDAY, MAY 13, 2013 

U.S. SENATE, COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, Washington, DC. 

The Committee met, pursuant to notice, at 3:07 p.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Thomas R. Carper, 

Chairman of the Committee, presiding. 

Present: Senators Carper and Levin. 

OPENING STATEMENT OF CHAIRMAN CARPER 

Chairman CARPER. The hearing will come to order, although this 

is a hearing that is already in order, even with a 51⁄2 month old 

baby girl, remarkably. I wish my boys were that well-behaved, Senator Levin, when they were 51⁄2 months old. 

Senator LEVIN. Almost as pretty as mine. 

Chairman CARPER. Almost as pretty as his, huh? Maybe so. 

I am going to start off with a statement and introduce our witness, and we are going to ask him to take an oath in a few minutes. Then we will get into your statement and then we will just 

ask some questions. 

Today we are pleased to consider the nomination of Brian Deese, 

President Obama’s choice to serve as our Deputy Director of the Office of Management and Budget (OMB), and we are pleased to note 

at the outset of this hearing, that the nomination process in this 

case is preceding, we believe as it should. The position for which 

Mr. Deese is nominated, became vacant in February of this year 

when OMB Deputy Director Heather Higginbottom took a new assignment at the Department of State with our incoming Secretary 

of State John Kerry, our former colleague. By early April, the 

President submitted the nomination of Mr. Deese, and Dr. Coburn 

and I have worked to review and bring the nomination before the 

full Committee expeditiously. 

In terms of process, I think this nomination has worked well at 

both ends of Pennsylvania Avenue. I hope it is a model that the 

White House and the Senate will continue to follow often in the 

weeks and months ahead. And in recent decades through both 

Democratic and Republican Administrations, the nomination and 

confirmation process have become unacceptably slow. At any given 

time, there are far too many vacant senior positions throughout our 

Federal Government. This lack of critical leadership undermines 

the effectiveness of our government, and a slow partisan process 
2 

discourages talented people from wanting to serve in our government. 

This problem has become so prevalent, I started referring to it 

as Executive Branch Swiss Cheese. That is I believe it is so important for our Committee to move forward promptly on nominations 

that fall within our jurisdiction. We have an obligation to vet them, 

to do our proper oversight, but once we are convinced that the 

President has made a good choice, we have, I think, an obligation 

to try to move it promptly. 

Nominations for the senior positions at the Office of Management 

and Budget are among the most important that our Committee will 

consider this year, or any year. 

As most of the folks in this room know, on April 24, by a vote 

of 96 to 0, the Senate confirmed the nomination of Sylvia Mathews 

Burwell to be Director of the Office of Management and Budget. 

She will be a strong and capable leader. Now the President and 

Senate share the job of surrounding her with a terrific team. 

Following today’s consideration of Mr. Deese’s nomination, we 

will soon consider the nomination of Howard Shelanski to be the 

Administrator of the Office of Information and Regulatory Affairs 

(OIRA). I hope that in short order, the President will submit a 

nomination for the position of Deputy Director for Management, 

which was recently vacated by Jeff Zients. I am not sure if Jeff 

Zients is off the payroll and has returned to private life, but if he 

is anywhere within the sound of my voice, I just want to express, 

on behalf of all of us, our heartfelt thanks for his hard work and 

leadership in very difficult times. Good man. 

Having strong leadership at OMB is important at any time, but 

particularly at this moment when our Nation is desperately in need 

of a long-term budget plan to rein in our Federal deficit and our 

debt. I have said it a time or two before, but it is just something 

here that bears repeating often. 

The grand budget compromise that I believe we need in order to 

address this fiscal crisis must have three essential elements to it. 

It must address both spending and revenues in a balanced approach; it must rein in the costs of our entitlement programs in a 

way that does not savage the poor or the elderly, but in a way to 

preserve those programs for the long haul; and it must, through 

better management of government programs, deliver better service 

to the American people at a lower cost. 

This Committee is an important partner with the Office of Management and Budget in all of these areas, but especially in ensuring that our government achieves better results for less money or 

better results for the same amount of money. We have a full agenda then, and Dr. Coburn and I are working in full partnership, 

along with many of our colleagues, including with Senator Levin. 

For example, we save billions of dollars by shedding Federal 

property that is no longer used, or at least we can and we should 

be. We can save tens of billions of dollars every year by reducing 

the amount of improper payments that the government makes. We 

can bring in billions of dollars of revenue by doing a better job of 

collecting taxes that are owed but not paid, and that is something, 

seriously, that Senator Levin, along with Dr. Coburn, has led the 

way on. 
3 

We can save billions of dollars in Federal contracting every year 

through efforts such as so-called strategic sourcing initiatives 

which include buying more in bulk when that makes sense. We can 

save billions of dollars through better management of the information technology (IT) that our government buys. And we can improve the transparency of government spending so that the American people have a better understanding of how their tax dollars 

are used. 

These are just a few examples of the ways this Committee and 

the Office of Management and Budget, in concert, are striving to 

make our government work better, and, I might add, in concert 

with the Government Accountability Office (GAO), in concert with 

our Inspectors General (IGs) across the government, and in concert 

with private non-profit organizations. 

I am pleased that we have before us today a nominee who has 

a firm grasp of the role of both the ‘‘M’’ and the ‘‘B’’ in OMB. And 

with respect to the ‘‘M,’’ the management, Mr. Deese understands 

the importance of driving innovations and efficiencies across the 

government so that agencies not only save money, but deliver better services to the American people. And with respect to the ‘‘B,’’ 

he is someone who is committed to achieving a comprehensive deficit reduction plan that will help our economy grow even as we reduce the budget deficits. 

Mr. Deese comes well-prepared for these challenges from his two 

positions at the National Economic Council, first, as a Special Assistant to the President for Economic Policy, and then as the Deputy Assistant to the President and Deputy Director of the National 

Economic Council. 

Mr. Deese has earned a well-justified reputation as someone who 

can absorb a tremendous amount of economic data, synthesize it, 

and translate it into viable options for the President and his economic team and also translate it into terms that even mere mortals 

like I can understand. 

On issues ranging from the auto bailout to housing issues to tax 

policy, Mr. Deese has helped our country recover from the recession, helped our economy before President Obama took office. He 

is someone who understands that our fiscal policies are intrinsically linked to the prosperity of the American people. 

Brian’s father, who is sitting right over his left shoulder, is a college professor, and his mom is an engineer. He clearly has inherited their smarts. He has an undergraduate degree from 

Middlebury College and a law degree from Yale Law School. Before 

going to law school, he spent time doing policy analysis for the Carnegie Endowment for International Peace, the Center for Global 

Development, and the Center for American Progress. 

I think anyone who meets Brian quickly realizes that he has the 

brainpower to pursue whatever profession he chooses, but he has 

a passion for public policy, and we are fortunate, specifically a passion for finding ways for our government to make smart choices so 

that individuals and businesses can prosper. 

In short, he is someone who quickly impresses his colleagues in 

the Administration. I believe he will quickly impress my colleagues 

in the Senate. 
4 

1The prepared statement of Mr. Deese appears in the Appendix on page 32. 

Normally I would turn to Dr. Coburn for any comments he would 

like to make, but in his absence, I am going to ask Senator Levin 

if there is anything you would like to say before I swear this man 

in and let him give his statement. 

OPENING STATEMENT OF SENATOR LEVIN 

Senator LEVIN. No, just to thank you, Mr. Chairman, for your 

usual speed and thoroughness in moving a nomination. I share 

your hopes that this nomination can be acted upon quickly. I do 

have a number of questions for Mr. Deese, but I just want to thank 

him for his willingness to continue serving, and to thank you for 

the way in which you handle this Committee, along with Dr. 

Coburn. 

Chairman CARPER. Thank you. Well, I learned from the best. 

A little introduction, if I can, and then I will ask you to stand 

and raise your right hand. But Brian Deese has filed responses to 

a biographical and financial questionnaire, answered pre-hearing 

questions submitted by the Committee. He has had financial statements reviewed by the Office of Government Ethics. Without objection, this information will be made part of the hearing record, with 

the exception of the financial data, which are on file and available 

for public inspection in the Committee’s offices. 

Our Committee rules require that all witnesses at nomination 

hearings give their testimony under oath, and, Mr. Deese, I am 

going to ask you to stand and raise your right hand. I am going 

to ask a couple of questions. 

Do you swear that the testimony you are about to give to the 

Committee will be the truth, the whole truth, and nothing but the 

truth, so help you, God? 

Mr. DEESE. I do. 

Chairman CARPER. Please be seated. At this point, you may proceed with your statement. I am going to ask you to introduce your 

mom, dad, and your bride, and I do not know if your daughter is 

still around here, but she may have taken an exit. But please introduce your family. We are just delighted that you are all here. I 

think it is a matter of family pride and I know you are proud of 

him and I am sure he is proud of all of you. Please. 

TESTIMONY OF BRIAN C. DEESE,1 NOMINATED TO BE DEPUTY 

DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET 

Mr. DEESE. Thank you, Chairman Carper. 

Thank you, Senator Levin. And thank you for welcoming me here 

today. It is a real honor to be considered as the President’s nominee to be Deputy Director of the Office of Management and Budget. 

As you have mentioned, I am joined by my family, my father 

David, my mother Patricia, my wife Kara, and my baby girl 

Adeline who promised me that she would behave and that is a 

promise I am not going to hold her to. And my sister Heather. 

Chairman CARPER. Tell us a little bit about your mom and dad, 

your wife, and your sister. This will not count on your time. We 

will stop the clock. Just tell us a little bit, a thumbnail sketch 

about each of them. 
5 

Mr. DEESE. I have been really privileged to have an incredible 

family, a mother and father who have supported me over the years 

and who have instilled in me both a real passion for ideas and education and also a commitment that for those of us who are fortunate enough to have opportunities in education and life, we should 

look for opportunities to give back, commit to public service. 

In particular, my sister who I am very close with. She is 2 years 

older than I am and she has been a rock in my life for the last 35 

years, and I thank her for that. 

Chairman CARPER. She is the one whose lips are moving while 

you speak? 

Mr. DEESE. She is very nervous on my behalf. But most of all, 

I would like to thank my wife Kara. Serving in these types of jobs 

is truly a team effort. I could not do it alone and she has been unbelievably supportive, particularly when we have been through 

harder times, and I know that the challenges of this job will be significant. And so, I am very grateful to her for all of her support. 

Chairman CARPER. For you, Kara, no purgatory, straight to heaven. Thank you. 

Mr. DEESE. I second that. I would also like to thank President 

Obama for nominating me to this position, and also Director 

Burwell, who you referenced, for her support and her confidence in 

me. And I hope that if confirmed, I can meet their high standards 

for performance on behalf of the American people. 

And finally, I do want to thank Members of this Committee and 

their staffs for taking the time to meet with me over the last couple 

of weeks, and if confirmed, I look forward to continuing the conversations that we have had and investing in the strong relationship between OMB and this Committee going forward. 

Over the past several years, I have had an opportunity to work 

with many officials at OMB, as well as across Executive Branch 

agencies, to develop and implement Administration policies, and 

this experience has given me a deep respect for OMB as an institution and the vital role that it plays. And perhaps more importantly, 

a real respect for the skills and the commitment of the professionals who work at OMB. 

That is just one of the reasons why I am very humbled to be considered for this position, and particularly at this time in our economy when we face very substantial fiscal challenges and economic 

challenges that we will need to address together. We have made 

important progress in the economy. Our economy is growing. We 

are seeing some important signs of strength in sectors from housing to our manufacturing industry. Most importantly, our businesses are creating jobs on a consistent basis. And I think together, 

Congress and the President have begun to make progress on the 

important work of bringing down our deficits and strengthening 

our Nation’s long-term fiscal position. 

But there is a lot more work that we need to do together to reach 

what I believe is the ultimate goal of an economy that is providing 

opportunity and real stability for working families. 

Much of my professional work has focused on the role that fiscal 

policy can play in that effort in promoting a stronger and more durable economy. And if confirmed, I will work closely with Director 

Burwell to build on the progress that we have made to try to reach 
6 

the type of comprehensive deficit reduction agreement you referenced that can support a stronger economy in both the short and 

the long run. 

Another key area of focus, particularly in this moment of fiscal 

challenges, has to be making our government more efficient and 

more effective and showing the American people how we can do 

more effectively with less. This is an area where this Committee 

has shown great leadership, and if confirmed, I look forward to 

working with you to make progress on many of our shared priorities. 

And finally, I do believe that the budget is fundamentally a vision for how we in public service can deliver better outcomes for 

the economy and for American families. It is a reflection of our values and our priorities, and if confirmed, I will work every day to 

uphold those values and priorities to the best of my ability. 

I want to thank the Committee for your time today and for considering my nomination and I look forward to answering all of your 

questions. 

Chairman CARPER. All right. Thanks very much. As you probably 

know, we begin the questioning of our witnesses in a confirmation 

hearing by asking the same three questions we have asked for as 

long as I have been here. I have been here for about 12 years, each 

year these hearings are the same. I am just going to ask you. Each 

of these questions is easy to answer. 

The first one, is there anything you are aware of in your background that might present a conflict of interest with the duties of 

the office to which you have been nominated? 

Mr. DEESE. No. 

Chairman CARPER. Do you know of anything, personal or otherwise, that would in any way prevent you from fully and honorably 

discharging the responsibilities of the office to which you have been 

nominated? 

Mr. DEESE. No. 

Chairman CARPER. And finally, do you agree without reservation 

to respond to any reasonable summons to appear and testify before 

any duly constituted Committee of Congress if you are confirmed? 

Mr. DEESE. I do. 

Chairman CARPER. All right. Senator Levin and I are big baseball fans, in fact, of the same team, the Detroit Tigers. I would say 

he is three for three. It is still early. 

Senator LEVIN. They have the same problem with their current 

closer, too. Losing too much sleep over it. 

Chairman CARPER. I know. Oh, well, our team lost today two out 

of three. 

Senator LEVIN. That is on the record. 

Chairman CARPER. In any event, we will turn to that problem tomorrow. 

I am going to start off by saying, if confirmed, why do you not 

just lead off by telling us what your, maybe, top three priorities 

would be. 

Mr. DEESE. Sure. This is something that I have had a chance to 

talk to Director Burwell about and I think that in terms of priorities in the Deputy Director role, first would be to work with Director Burwell in setting out a budget framework for the government. 
7 

And I think in the current context, that means in particular trying 

to work to encourage the movement that we have seen toward a 

more regular order budget process and also to try, however challenging, to work toward the kind of comprehensive deficit reduction 

agreement that I think could benefit the economy. 

A second priority is to work to set priorities to make the government more efficient and effective, and I think that the Deputy Director plays an important role in setting those inside priorities and 

then also making sure that we as a team at OMB would be wellpositioned to execute on those. 

And I think in particular, from my perspective, the relationship 

between the Deputy Director and the Deputy Director for Management is vital in that context. And so, if I am confirmed, that would 

be something that I would invest in, in particular. 

And third, a priority would be OMB as an institution. And OMB 

has a strong reputation for strong analysis and excellent professional staff. It is also facing a lot of challenges today, and so I 

think that investing and making sure that the institution is able 

to continue to attract and recruit top flight talent, continue to do 

the analyses and play the vital role that it needs to play in our system would be another priority. 

Chairman CARPER. Have you had the opportunity to discuss at 

all with our new Director, Sylvia Burwell, how your role—her role 

as Director and the role of the Deputy for Management, what that 

would intertwine? 

Mr. DEESE. I have. 

Chairman CARPER. Maybe give us some practical examples of 

how that would be. 

Mr. DEESE. Sure. I have and I think that Director Burwell has 

talked about building a great team, and I think that is the way 

that both of us would approach this, is having a great team in 

place to make sure that we are achieving all of the objectives that 

we need to achieve. 

I think that one particular priority for the Deputy Director, my 

role if confirmed, would be to work on setting out that budget 

framework and making sure that we are working across agencies 

to incorporate their points of view into the budget process and the 

budget framework and making sure that we are implementing key 

budget priorities. 

But as I mentioned earlier, I think that the other important role 

of the Deputy Director is to make sure that the ‘‘M’’ side and the 

‘‘B’’ side are working seamlessly together. And so, I think that 

means, one, being a part of setting the priorities for the management side of OMB; and then having a close relationship with the 

Deputy Director of Management and making sure that where there 

are priority areas for providing sufficient guidance and sufficient 

attention to make sure we are executing on our goals. 

Chairman CARPER. Would you share with us your overall philosophy on addressing the Federal deficit and our long-term debt, 

please? 

Mr. DEESE. Sure. I think that we are at a moment, an economic 

moment, right now where the need for deficit reduction also presents an economic opportunity where we have a set of long-term 

fiscal challenges and we have a set of short-term economic chal-
8 

lenges, and that if we could come together around a comprehensive 

deficit reduction agreement that provided more confidence about 

our long-term path, we would also be able to provide more support 

to the economy in the short run. 

And so, when I think about what are the most important priorities in that space, I think that the areas we need to focus on are 

entitlement reform and tax reform. And I think as you mentioned 

in your opening statement, entitlement reform that is designed to 

strengthen the core programs that our seniors and vulnerable 

Americans rely on, but then look for ways to address, in particular, 

the rising cost of health care and look for ways to increase efficiencies and actually drive systematic change to drive down the 

rate of growth of health care across our system. 

And I think on tax reform, we have an opportunity to reform in 

a way that reduces complexity, encourages greater economic 

growth, and also contributes to reducing the deficit as well. And I 

think that there are real opportunities in that space, economic opportunities to bring those things together as part of an overall approach. 

Chairman CARPER. How does your work leading up to this point 

help to prepare you for the responsibilities that you have been 

nominated to undertake? 

Mr. DEESE. Well, when I think about the Deputy Director role 

and the responsibilities that we were just talking about, I think 

there are three sets of skills that I could bring to bear. The first 

is a sound understanding of the Federal budget. I think that is important and it is something that I have developed over the last several years, worked closely on the development of the last several 

budgets, and also in implementing it, working with the staff at 

OMB and other agencies. 

The second is an understanding of how fiscal policy fits into an 

overall economic strategy to try to help grow the economy and create jobs. And that has been the focus of much of my professional 

work, and I think it is particularly important now because we are 

at an economic moment where we have these interrelated fiscal 

and economic challenges. 

And the third is a more pragmatic understanding of how to get 

things done in government, and I think that the work most recently as Deputy Director of the National Economic Council that I 

have done has prepared me to know how to work across agencies, 

identify teams, bring together senior management across the Federal Government, set a priority, and try to drive for results. And 

I think those are the kind of skills that I think I could bring to this 

job. 

Chairman CARPER. OK. Not long ago Ben Bernanke, the Chairman of the Federal Reserve, came to meet with the Senate Finance 

Committee, Democrats and Republicans, not an open meeting, but 

a very informative meeting. He was going to talk to us largely 

about budget deficits, how to reduce the deficit, and how to do it 

at the same time that we strengthen our economic recovery. 

And I asked him, I said, as we rein in the growth of spending 

broadly across the government, are there any particular places 

where we should invest more? And he picked out three. One he 

said the workforce, world class workforce; No. 2, he mentioned we 
9 

should focus on infrastructure broadly defined; No. 3, research and 

development that could create technologies and products, goods and 

services that we could commercialize and sell all over the world. 

Would you just react to what he told us that day? 

Mr. DEESE. Sure. I think that, when you think about those three 

areas, I think the thing that all three of them share is that they 

are linked to long-term productivity growth in our economy. And 

so, when we think about where are the places where we need to 

make targeted investments, even in the context of a difficult fiscal 

environment, I think that using that as a metric of where can we 

identify the strongest linkages to future productivity growth and 

future competitiveness is important. 

And so, I think that infrastructure, for example, is a good example of that where smart, well-designed targeted investments in improving our infrastructure has been shown to increase productivity 

because it makes it easier for businesses to come and invest and 

create jobs. And I think identifying those kinds of opportunities is 

very important as part of this overall fiscal strategy. 

Chairman CARPER. All right. Thanks very much. I have used up 

my time and we will come back for a second round. Senator Levin, 

please. 

Senator LEVIN. Thank you, Mr. Chairman. First, let me thank 

you, Mr. Deese, for your accessibility in the past. You have been 

helpful in the area of the auto issue that you were very actively 

involved in. You were always available to me and my staff and we 

were grateful for that. You have been hard-working, and I think 

there is no doubt about your qualifications for this office. 

I do have a couple questions, however, as to where Gene Sperling 

has been and where you have been on the question of revenues to 

address our deficit. I take it from your answer to the Chairman’s 

question that you believe that tax reform, as you talk about it generically, needs to contribute to the deficit reduction effort. 

Mr. DEESE. I do. I think that is important. 

Senator LEVIN. And so, what I want to focus on is one part of 

tax reform. I have spoken to Mr. Sperling, and I think I have probably spoken to you, on a number of occasions, but at least I have 

to him, about how is it that some of these egregious tax loopholes 

that corporations utilize to avoid paying taxes, when they are 

closed, if they are closed, why the revenues from those closures of 

those unfair, unjustified tax loopholes—and I am going to go 

through a few of them with you—should not be used for deficit reduction to also fight for programs which are being cut through sequestration such as education and health care and the environment 

and food safety, and you name it. 

Why should those revenues that would come from closing those 

corporate tax loopholes not be used for any number of extremely 

important goals from deficit reduction to ending sequestration to, 

again, trying to fund the programs that are important to our people 

that are now being cut? So first generally, should those revenues 

be available for those purposes? 

Mr. DEESE. Well, I think just to go at the question of tax reform 

for a second—— 

Senator LEVIN. But talk about the corporate tax that I have identified. 
10 

Mr. DEESE. Sure. 

Senator LEVIN. I will get more specific, but I think you have read 

enough of the stuff I have sent to your office to know where I am 

going to go in the next few minutes. 

Mr. DEESE. Absolutely. Look, I think the most important issue 

on corporate tax reform, as we undertake it, is to judge any reform 

by the metric of, is it going to improve economic growth and, in 

particular, are you going to improve incentives to invest in the 

United States? And I think that is the real opportunity with respect to corporate tax reform. 

I think you are correct that when you look at the corporate tax 

code today, it represents and opportunity because we have this 

somewhat perverse situation where we have the highest statutory 

rate in the industrialized world, and yet we are not collecting revenues. We are sort of in the middle of the pack at best, and that 

is a function of the fact that there are a lot of tax expenditures that 

are either inefficient or they are not serving their intended purpose. 

And that creates an opportunity to reform the system, broaden 

the base, and also—— 

Senator LEVIN. Why do you not focus also on the effective tax 

rate, which is not one of the highest in the world? 

Mr. DEESE. That is right. And so, it is exactly that dynamic that 

creates an effective tax rate sort of in the middle or to the lower 

of the industrialized countries. So I think the question is, can we 

reform that tax code in a way that actually is for growth and improves domestic incentives to invest? I think the answer to that is 

yes. 

So, I think there is an opportunity here and I think that with 

respect to specific corporate tax expenditures, I think the President 

has put forward a whole set of them in the budget that he put out 

and those are ones that I think we could afford to close efficiently 

without doing harm to the economy. 

Senator LEVIN. Well, a bunch of these loopholes that are being 

used to drain our Treasury, to ship money offshore, serve no economic purpose. They are not pro-growth. They do not promote people to invest in the United States; quite the opposite. You have 

Apple that has what, $120 billion now in cash, most of it offshore. 

They are not going to bring it back unless they get a lower tax rate. 

So there it sits. 

We have companies that transfer their intellectual property to 

themselves in tax havens and shell corporations and then pay 

themselves to use their own property. There is no economic purpose 

served in that. It is nothing more than tax avoidance. The President says he wants to close them. The President, when he was a 

Senator, co-sponsored much of the legislation that would have 

closed at least some of those egregious tax avoidance tactics, which 

costs our Treasury God knows how many tens of billions a year and 

maybe $100 billion a year. 

We could end sequestration, at least for this year and next, if we 

closed some of those schemes which drain our Treasury and ship 

revenue offshore. Why should we not do that? 

Mr. DEESE. Well, I think the framework the President has put 

forward—— 
11 

Senator LEVIN. Why should we not do what I am saying? I am 

not talking about the President’s framework which just talks about 

cutting corporate rates, which, by the way, are already low as an 

effective tax rate. By the way, corporate tax revenues to this Treasury are at an all-time low. There are something like 9 percent of 

our revenues come for corporations. 

We have 30 corporations, the biggest corporations in the world 

that have not paid taxes for the 3-year period studied. Paid zero 

in taxes. Why not close those egregious, unjustifiable loopholes, 

that are costing our Treasury so much money, and use that revenue to end sequestration this year and next year? Why not? 

Mr. DEESE. Well, I think that what the President has said is we 

should close—— 

Senator LEVIN. No, for that purpose, why not close them and use 

the revenue for that purpose? That is my question. 

Mr. DEESE. Well, again, the reason why I raised the framework 

is because if you look at the budget, it has a set of specific corporate tax expenditures and corporate tax loopholes that it would 

close. That is revenue that could be used to reduce the deficit or 

invest in other priorities. 

Senator LEVIN. Why is it in the budget said to be used only for 

rate reductions? 

Mr. DEESE. Well, I think what the President has said is twofold, 

which is if we can move to close those loopholes, let us do so. Let 

us try to work together to do so. But if there is a good faith commitment to try to do comprehensive corporate tax reform and if 

that can be done in a way that actually is pro-growth and actually 

would increase incentives to invest in the United States, then he 

is willing to consider doing that in a revenue-neutral manner. 

Senator LEVIN. But if that cannot be done or is not done this 

year, why not take the revenues from these loopholes which have 

no economic purpose, other than tax avoidance, and take that revenue to end sequestration? If we cannot do the individual tax increases or revenue increases from the Buffet Rule or whatever, if 

we cannot succeed in getting that revenue, if the President does 

not succeed, why not take the revenue which should come to the 

Treasury, frankly, if there were no deficit from these tax avoidance 

schemes? Why not? 

Mr. DEESE. So again, I think the budget lays out those parameters and if we cannot move on corporate tax reform, we should 

move to close those types of loopholes. 

Senator LEVIN. Mr. Chairman, my time is up, but I do have a 

few more questions. But thank you. Sorry I went over. 

Chairman CARPER. No. I would have let you use more. 

Let me go back and just revisit something I said earlier and just 

try to draw out some further discussion. I mentioned the conversation we had with the Federal Reserve Chairman, talking about investments that we should make even as we rein in the spending, 

the important investments to make to grow the size of the economic pie in our country. 

We had a previous Vice Chairman of the Federal Reserve come 

and testify in a hearing last year on deficit reduction, Alan Blinder, 

who is back now teaching economics, I think, at Princeton. And he 
12 

was one of, I think, a four-or five-member panel discussing with us 

a year or so ago how we could go about reducing our deficits. 

I will never forget what Dr. Blinder said. He said the 800-pound 

gorilla in the room on deficit reduction for the Federal Government 

is health care costs. And he did not say this, but as we know, we 

spend roughly 16, 17, 18 percent of GDP for health care in this 

country. In Japan, they spend about 8 percent. They cover everybody and they get better results in many respects. I would like to 

say they cannot be that smart; we cannot be that dumb. 

But Dr. Blinder went to say, the 800-pound gorilla in the room 

on deficit reduction is health care costs. If we do not get our heads 

around it, get our arms around it, we are, in so many words, 

doomed. 

When it came time to ask questions, a question I asked of him, 

referring to his statement about the 800-pound gorilla in the room, 

and said, What would be your advice to us? If we are serious about 

deficit reduction, we know a big piece has to be health care costs. 

What should we do? And he thought for a moment and he said, I 

am not an expert on this matter. He said, I am not a health economist, but this would be my advice to you. Find out what works, do 

more of that. That is all he said. Find out what works, do more of 

that. 

My response to that was, I said, find out what does not work and 

do less of that, and he said, yes. But I think there is great wisdom 

in that, not just for spending money in health care more wisely, but 

for education, housing, transportation, all kinds of issues. 

One of my guiding principles, and I owe it to him, knowing how 

important reining in the growth of health care costs is, talk to us 

about how we might do that, some ways that we might do that, 

particularly with respect to Medicaid and Medicare, in ways where 

we do our best not to savage old people, poor people, but at the 

same time, we get a better result for less money or better result 

for the same amount of money because we need to. Please. 

Mr. DEESE. Well, I think there is a lot of wisdom in that statement and, in particular, that in the health system, we really do 

need to identify those things that are going to drive innovation 

across the system and then make sure that they are spread broadly. 

I think the good news is that there is a lot of very exciting activity going on in our health care system right now, a lot of anecdotal, 

and in some cases, more than anecdotal evidence of what Dr. 

Blinder was referring to, places where we are seeing things that 

work, things like accountable care organizations where you are actually starting to structure payments and incentives around providing certain quality of care outcomes, rather than just paying for 

inputs independent of outcomes. 

Those are the kinds of potential measures that if we can identify 

them, we can measure them. We can actually verify that those 

work. And then we can spread them across the system. That is 

going to be the way that we help to really drive systematic change 

in the health care system. I think that we have a number of tools 

out there to help on that front to try to identify these game-changers, as some people refer to them, and I think that we need to look 

for additional ways to do that as well. 
13 

You mentioned outside of the health care space, and I think that 

is an important component as well, and one of the things that I 

know that OMB has been working on and that if confirmed I would 

want to learn more about. I think the focus should be on evidencebased investment and evidence-based grant-making because there 

are a number of places where we can do better and, in fact, we can 

be more effective with the same or fewer dollars if we actually have 

better systems to measure and test results and then scale programs when we actually see positive effects. 

So I think that it is an important principle. It is applicable beyond the health care space, but I agree that the health care area 

is the place of both the greatest need and the greatest opportunity. 

Chairman CARPER. Just before I caught the train to come down 

here today, we met with representatives from a large health insurance company back in the part of the world where I live and my 

family lives. We talked about some of these issues, delivering 

health care, better results for less money. What we talked about— 

you mentioned the accountable care organizations. We talked about 

patient-centered medical homes. 

What I think they do is represent a way to encourage collaboration, encourage a sense of teamwork in terms of delivering health 

care, to move away from fee-for-service, to just a lot of stovepipes 

that operate almost independently of each other without a lot of 

collaboration. Quite a different approach. 

If you look at Medicare, Medicare is pretty much a fee-for-service 

animal, and we have some elements in Medicare where we actually 

do something like coordinate the delivery of health care better than 

we do in a straight fee-for-service. 

They had a problem in the past with Medicare Advantage being 

over-priced and we tried to address that to provide a smaller reimbursement so that the pricing is more reasonable, but at the same 

time, to encourage people to take advantage of a health care delivery system that moves away from fee-for-service. 

We could just talk about this. How do we move away from feefor-service? How do you do it in a way that actually saves some 

money? What role does Medicare Advantage play here? 

Mr. DEESE. Well, I think that has to be the goal and we have 

to figure out ways to do it that, as you say, end up strengthening 

the program, while also making the program more efficient. I think 

that the recent changes to Medicare Advantage which you referenced, I think, are being effectively implemented. We have seen 

premiums come down, enrollment go up, and we are saving money 

at the same time. 

I think that the most effective way that we can do this is by continuing the process of experimentation, identifying what works, 

and then scaling it. And I think that is, in a health care system, 

not just Medicare, but also across the health care system that is 

as complex as the one that we have in our economy, we have to 

make sure that we are testing results and then scaling them so 

that we know what works. 

And I think the linkage between Medicare and the rest of the 

health care system is important because I think ultimately, what 

our goal here is to do is to drive down the rate of growth of health 

care costs systemwide, because if the savings only accrue in Medi-
14 

care and costs are increasing outside, we are not going to address 

the overall economic challenge that you referenced earlier of a larger and larger share of our gross domestic product (GDP) being 

eaten up by health care. 

So I think that it is about looking for ways to make programs 

like Medicare Advantage more efficient. I think we have seen some 

progress on that front, and I think it is about identifying successful 

interventions and scaling them over time. 

Chairman CARPER. All right. I will probably come back and revisit this in our next round, but let me yield now to Senator Levin. 

Thank you. 

Senator LEVIN. Thank you, Mr. Chairman. How important is it 

that we reverse sequestration? 

Mr. DEESE. I come at this issue from an economic point of view, 

and when I look at the data and the independent analyses that 

have been done, I think that there are two problems. The first is 

that the sequester is a relatively blunt tool and it is forcing indiscriminate cuts, about which I think there is wide agreement, are 

not sensible. 

But second, the magnitude of the cuts imposed over such a short 

period of time, it is hard to do that without having a really material negative impact, and the Congressional Budget Office and others who have looked at the issue, have concluded that you are 

going to have a material negative economic impact. 

And so, I think that it is very important from an economic perspective that we look for a way to replace what is a blunt instrument that is going to do damage to our economy now with an approach that actually achieves greater deficit reduction, has more 

long-term reforms that actually will get at some of the issues that 

we were talking about, but that has a more sensible approach economically in the short term as well. 

Senator LEVIN. And is it important that the deficit reduction that 

you are talking about be balanced? 

Mr. DEESE. I think—— 

Senator LEVIN. In other words, that it have revenue and entitlement reform and it have more prioritized or targeted discretionary 

spending cuts? Should all three of those be part of a balanced deficit reduction? 

Mr. DEESE. I think the short answer is yes, when you look at the 

deficit reduction as part of an overall economic strategy. We have 

to ask the question of, what is going to make sense for the economy 

in the short and the long term, and I think that in order to maintain the kinds of productivity-enhancing investments, like infrastructure and basic research that we were talking about earlier, 

while also hitting our long-term deficit reduction goals, that the 

best way to do that is to try to bring revenues from tax reform and 

entitlement reform together done in a way that actually strengthens our entitlement programs in the future. 

Senator LEVIN. Donald Regan, who was the Secretary of the 

Treasury under President Reagan, wrote a book and this is a conversation that he recounted from the Oval Office. He said that 

President Reagan liked to start off every meeting with a story or 

a joke. So Don Regan decided he wanted to introduce a very serious 

subject, so he asked the President this question. 
15 

He said, What do these 60 big corporations have in common? He 

rattled off the biggest corporations in America. And President Reagan’s interest, he said, was immediately aroused. He said, I do not 

know, what do they have in common? And so, the Treasury Secretary said, Let me tell you, Mr. President. What these outfits have 

in common is that not one of them pays a penny in taxes to the 

U.S. Government. 

What the President said? His shock was genuine. A dumbfounded silence settled over his economic advisors. What unconventional idea was I trying to plant in the President’s mind now? Believe it or not, Mr. President, your secretary paid more Federal 

taxes last year than all those giant companies put together. The 

President flushed, a sure sign of surprise and discomfort. 

I just cannot believe that, he said. His Treasury Secretary says, 

I do not blame you for doubting it, but it is the truth. I checked 

it out. It is perfectly legal, but it is wrong, Mr. President, when a 

hard-working secretary pays more to support her government than 

60 of the richest corporations in the land. He said, I agree, Don. 

I just did not realize that things had gotten that far out of line. 

Well, things are that far out of line and it seems to me that what 

we need is some of that getting disturbed, bothered, troubled when 

we have some of the largest corporations in the country either paying no tax or using these gimmicks to shift revenue offshore to 

avoid paying taxes. 

I would love to see someone in the White House, the economic 

advisors, or you now as the Deputy Director of OMB to get mighty 

mad at this situation. We are facing sequestration. It is incredibly 

bad. It is the wrong way to budget. Everybody knows that, I think. 

Just about everybody knows it. 

And to say that we are not going to do the right thing in terms 

of closing these loopholes unless we can get corporate rates reduced, it seems to me, is ignoring a very troubled reality, and that 

is something else which Donald Regan, a conservative Republican, 

said in his book. 

The accumulated weight of the inefficiency and selfishness that 

they had created had become a burden on the economy and an affront to economic and social justice. Donald Regan is talking about 

economic and social justice. If he can do it, I would hope the Administration can do it. I would hope the OMB can do it. 

The American people, by survey after survey, say they want 

these tax loopholes closed when they are informed particularly of 

the loopholes which allow corporations to shift revenue to a tax 

haven. And they are asked, No. 1, what do you want to do about 

it? End it. 

No. 2, what do you want to do with the revenue? They specifically say, in about a five-to-one margin, reduce the deficit, and 

fight to avoid cuts in education or in health care or in the infrastructure. That is what they want to do with it. 

You are going to be in a position where I would hope that there 

would be some serious thinking in the White House about whether 

or not we can, No. 1, continue a sequestration and if the way to 

avoid it is to get a balanced approach with revenues coming from 

a source that nobody can justify. I have not heard anybody justify 

these kind of loopholes. 
16 

You can justify an oil and gas deduction. I do not favor it, but 

you can justify it. At least it is an incentive to produce oil and gas. 

You can justify accelerated depreciation, which I do favor, because 

it will give an incentive to buy equipment and new machinery, increase productivity, and create jobs. 

But these are at least arguably useful deductions. The ones I am 

talking about, which have been sent consistently, regularly to your 

office, have no economic justification. They ought to be closed if we 

had no deficit, but surely with a deficit and sequestration, I would 

hope that you will take another look at these and not link their 

closing to reducing corporate tax rates. There is no logic to that. 

If these are unfair, unjustified tax loopholes, we need the revenue and we ought to get it, surely, as part of a balanced approach 

to deficit reduction. So you have already commented on that and 

I just would leave that thought in your mind as you are hopefully 

confirmed to be the Deputy at OMB. There are lots of other issues, 

obviously, that you have to face. It is a huge job. We wish you well. 

Mr. DEESE. Senator, thank you, and I will say that I am happy 

to look further into that and to work with you and your office on 

that issue if confirmed. 

Senator LEVIN. Thank you, Mr. Chairman. 

Chairman CARPER. Thank you, Senator Levin. There has been no 

shortage of initiatives that have focused on Medicare led by people 

like Alice Rivlin, people that include like Tom Daschle, and folks 

that are practitioners, very smart people, Jonathan Gruber from 

the Massachusetts Institute of Technology (MIT), that have actually looked at Medicare and said, These are some ways where we 

can save some money, save these programs in the long haul, and 

do so in a way that does not savage older people or poor people. 

What do you think are some of the most promising ideas? Not 

the ones we absolutely have to do, but what do you think are some 

more promising ideas that you have heard? 

Mr. DEESE. Well, I think all of the most promising ideas share 

a similar character which is they go at incentives. And so, the accountable care organizations that we were talking about earlier try 

to address the incentives for teams of doctors to try to focus on outcomes rather than inputs. 

Another specific example is how to get at the issue of bad debt 

payments. If a hospital cannot collect bad debt payments, then 

Medicare reimburses. And what that creates is a system where 

there is no accountability, there is limited incentive to actually go 

out and seek reimbursement. 

I think that is a place where if we were to change some of the 

rules in Medicare we could try to put more of an incentive for hospitals to take on that kind of activity on their own. That is another 

way, again, where I think what you do is you are driving efficiency 

by changing incentives. 

And I think that we also have to be willing to look at whether 

there are things that we should do with respect to, on the beneficiary side, that are smart and that meet the principle of strengthening the program and strengthening the core commitment of the 

program. 

And so, I think it is appropriate to look at means testing Medicare. I think the President has put a proposal out that I think 
17 

makes some sense, because as part of these overall reforms, I think 

we have to ask the questions about whether those who are the 

most fortunate should be paying a little bit more. It is still going 

to be a good deal for them as part of the system. 

So I think that if you can package together a set of these types 

of reforms that go after incentives that make sure that we are putting a program into the future that is actually going to be able to 

be viable, then that is the way we are going to start making 

progress. 

Chairman CARPER. Dr. Coburn could not join us today. I do not 

think he is going to be able to arrive before our hearing concludes. 

But among the many issues that he has been focused on and has 

done a lot of work, with the help of his staff, is on the area of duplication. With an enterprise as large as the Federal Government 

we should not be surprised that there is duplication. 

There is in any large corporation and we have it in spades in the 

Federal Government, as you know. The GAO has given both Congress and the Administration a number of recommendations to reduce duplication and there is a whole lot of work to be done. 

How will you work in your new post, if confirmed, to go after 

some of that duplication? 

Mr. DEESE. Well, the issue is one that I know Dr. Coburn has 

taken a leadership role on and others in the Committee as well, 

and I think that GAO is playing a constructive role in the process 

by doing a set of reports that actually help to identify and flesh out 

because it helps focus attention and identify areas for progress. 

I think in the role, if confirmed, I would approach the issue from 

two ways. One is, where are there places within the Executive 

Branch’s authority today that we can help make progress in addressing inefficient duplication? I know there is a whole range of 

proposals that have been put on the table and I think the Administration has already started to make progress on a number of 

counts. 

But if confirmed, I want to ask a set of questions about where 

are we and can we accelerate some of that, some of that progress. 

And in places where we have not moved, why is it? And are we 

sure that we cannot make some progress there as well. 

And then the second is in trying to work with Members of this 

Committee to identify where are the highest value places where 

legislation may be needed, but where we think there is a pragmatic 

opportunity to actually make progress. 

So the President’s budget puts forward a couple specific proposals on duplication, one in the area of science, technology, engineering, and math (STEM) where we have a myriad of programs 

across the government, all well-meaning, but a real opportunity to 

deliver better results if we consolidate programs. 

And likewise in the area of job training. But what I would like 

to do if confirmed is understand and learn from Members of this 

Committee where you think and where we think we could actually 

make some tangible progress in the legislative front and then try 

to build some momentum there. 

Chairman CARPER. One of the things I would keep in mind, if 

you have, we will say, 100 programs across the government that 

are focused on raising student achievement in the science, tech-
18 

nology, engineering, math fields, one of the logical steps would be, 

in my judgment, is to be able to measure which of these programs 

are getting the kind of result that we are looking for and which 

ones are not, and being able to push more money toward the ones 

that are working and less money toward those that are not. That 

means we have to be able to measure progress and then be able 

to convince folks like Senator Levin, Dr. Coburn, and myself of 

that. 

I want to just focus a little bit on one of the areas that Dr. 

Coburn and I and others on this Committee have focused on which 

is improper payments. People looked pretty amazed to find out 

about 10 years ago, that the amount of improper payments that 

our Federal Government was paying were largely mistakes, counting errors, duplicate payments, or erroneous refunds. 

But in there we found that it added up to about, I want to say about $40 billion when we first passed legislation, I think, in 2002, 

that said Federal agencies have to start reporting your improper 

payments. 

Not everybody did right away, but over time, more and more did. 

We finally passed legislation about 2010—Dr. Coburn and I co-authored it—on improper payments that said basically four things. 

Not only, Federal agencies, do we want you to report improper payments, we want you to stop making them. 

And we also want you to go out and recover improper payments 

when you report all this, and we want to start rewarding or 

incentivizing managers. Part of their performance evaluation is to 

be evaluated on how well they and their agencies reduce improper 

payments, and recover over-payments. 

We saw, I think in 2010, improper payments peak out at about $121 billion. It is a lot of money. And we have seen the numbers 

drop over the last 2 years now down to about $108 billion. I think 

a reduction, if my number if right, about $13 billion over 2 years. 

Pretty encouraging. We still have a lot out there. 

And at the same time, I think we have seen recoveries of improper payments where we have gone out and recovered, I think, 

between $4 billion and $5 billion maybe in the last year or so. But 

there is plenty of work still to do. 

I am going to ask you just to take a moment and think out loud 

for us, if you will, what more we can do to go after that $108 billion 

number of improper payments. 

Mr. DEESE. Yes. 

Chairman CARPER. That is not all fraud. I mean, a lot of it is not 

even fraud. It is just mistakes. 

Mr. DEESE. I think that it is a very important issue and I think 

that you are right that while we have seen some real tangible 

progress and some that is stemming from the important legislation 

that you and others have worked on and passed, the current level 

is unacceptably high, and so we have to be committed to moving 

to do more. 

I guess when I think about how to do that, I think about two 

issues. One is technology and data, and the other is evidence. And 

so, on the technology and data side, I think that as I understand 

it, a lot of the issues associated with improper payments are a 

function of not having effective data sharing between agencies to 
19 

actually identify whether and when payments should and should 

not be made. 

And so, I think there are opportunities to try to improve the way 

that we are sharing data through better use of technology. And we 

have to be careful about protecting privacy in that process, but I 

think that is an opportunity. 

The other place, and this goes back to some of the conversations 

we were having about Medicare, that I think that the program integrity efforts that we have identified that we know are based in 

evidence and can return several dollars, eight-to-one, nine-to-one 

returns include things like in Medicare and Social Security with respect to continuing disability reviews, and also at the Internal Revenue Service (IRS). 

Those are places where I think we know there is an opportunity 

and that we have evidence to back that up. And so, we should 

think about how we can do more in those spaces. 

Chairman CARPER. One of the initiatives that Dr. Coburn and I 

worked on in the last Congress, something called the Medicare and 

Medicaid Fighting Fraud and Abuse to Save Taxpayers’ Dollars Act 

(FAST Act), and the focus there is how do we save money, particularly in Medicare and Medicaid. We have had a situation for a 

number of years where dead doctors have provided medical services 

to folks who may be alive, but they may not be. They may not be 

eligible for services. 

And we see situations where we are paying enormous amounts 

of money, in some cases, for medical equipment. We are not using 

competition. We are finding out if we do, we could actually save 

some money. 

But Dr. Coburn and I are reintroducing an updated version of 

the FAST Act, probably in the next week or two, and certainly in 

the next month. And let me just ask, is this something that you 

have ever heard of? And if you have any thoughts about how we 

might work together on this? I would welcome those thoughts. 

Mr. DEESE. I have heard of it. I am not that familiar with the 

legislation, and so I would want to hold off and actually take a look 

at the legislation before giving you a full response. But I think generally speaking, it is an area where I am very interested and I understand that there is real potential. And so, I would look forward 

to taking a look at that and working on the issue, if confirmed. 

Chairman CARPER. All right. Thank you. I want to delve into an 

area called Government Performance and Results Act (GPRA), and 

I do not know if you are at all familiar with that, but Congress, 

in 2010, updated the Act, thanks to the work of one of our former 

colleagues here, Danny Akaka from Hawaii. I think former Governor, now Senator, Mark Warner was involved in this. I worked 

on this, my staff and I, but it is a bipartisan kind of issue that our 

Republican colleagues, especially on this Committee, are very much 

interested in. 

But it requires, as you know, data-driven performance reviews. 

And I wonder if you could just tell us if you see this particular approach as a useful tool in measuring performance. And if you will, 

what should be the role of OMB in implementing this law? 

Mr. DEESE. I think it is an incredibly valuable tool because one 

of the things that I think is very important when we think about 
20 

performance in the government is setting priorities. And as Director Burwell has said on numerous occasions, if we try to do everything we will not do everything well. 

And I think that having a framework to actually set goals and 

set priorities, but then also use that as a way to actually drive real 

accountability and culture change within the agencies, that has got 

to be our objective. And I think, as you said, the GPRA framework 

allows us to do that. 

And I think one of the things that is important about that is the 

link between goal-setting and accountability. And so, I think, for 

example, when I go on the Web site and I can actually pull up a 

goal and I see the picture of the person at the agency, this is the 

senior level manager, this is the senior person who is accountable 

for executing on that goal. I think that is the kind of positive development that this framework allows, because ultimately, it is moving from a compliance mentality to more of an accountability mentality that I think is actually going to help get results. 

I think the role that OMB can play, my understanding is that 

OMB plays an important role in coordinating the goal-setting process across the agencies and then helping to make sure that agencies have the tools that they need to hit these accountability 

metrics. And so, that is certainly a role that I think is going to become even more important over time and something that I would 

want to prioritize myself if I were confirmed. 

Chairman CARPER. It is not everybody who runs for office, who 

says I want to be a Senator, a Representative, President, or Vice 

President because I want to make sure that we do our dead-level 

best to use this GPRA law to get things done and to do more in 

a more cost-effective way. 

Not everybody wants to say, well, we have to figure out how 

many data centers that we are going to have and how much of our 

information we are going to put up on the cloud. You do not find 

many people who come here with the idea of doing those kinds of 

things. 

But everybody is intent on hammering down and getting rid of 

improper payments. We have been chasing down the fraud. But a 

lot of people on this Committee are. It is a Committee that draws 

and attracts those kind of people, in some cases, because we are 

former Governors or mayors or maybe attorneys general. 

I spoke earlier about the three things that I think are three components I hear over and over again, if we are serious about deficit 

reduction progress. One, we need some additional revenues closer 

to the level that persisted when balanced budgets were in the Clinton Administration or revenues as a percentage of GDP range between 19.5 and maybe 20.5 percent, or right around 20 percent. 

Spending was also right around 20 percent. 

And as Dr. Coburn suggested, it does not have to be based on 

rates. If we are smart about it, we will find other ways just to get 

the effective tax rate up by going after provisions in the Tax Code 

that, frankly, do not make a lot of sense, or maybe are unfair, and 

do not enhance economic development. 

The other thing that we need to do, and I keep coming back to 

this one, and we as Democrats especially need to keep this in mind 

is the third piece, how do we get better results for less money in 
21 

everything we do. It almost is like a culture change where we look 

in every nook and cranny of the Federal Government and ask that 

question and try to move from a culture of spendthrift to a culture 

of thrift. 

It is hard for one Committee to do that. It is impossible. It is 

hard for one Committee, even if you have a lot of people who are 

interested in this stuff and folks on our staff, it is hard even if you 

work with OMB. It is hard to get that done. Even if you are working with the House, it is hard to get it done. It is hard if you are 

working with the Government Accountability Office or with all the 

IGs, all the inspector generals across the Federal Government. 

What we try to do is to leverage the effectiveness of our Committee in going after ineffective spending by partnering with all the 

above. And we need to—this is again, as I said, is a shared responsibility, all hands on deck. 

Would you just talk a little bit about how you think, in your position at OMB, how OMB can be maybe a better partner in that 

leveraging activities? 

Mr. DEESE. Sure. I think there is a couple things that OMB is 

particularly well-positioned to do. I think the first is to invest in 

a relationship based on transparency and trust with both this Committee and some of the other actors that have a vital role to play 

in this overall process. 

And I think that having a sense that we are working together 

to set those priorities that I was just referring to, that we are looking for opportunities to incorporate different points of view. I think 

that is important in building a relationship that actually will be effective at getting things done, as you say, when it is an effort that 

is going to require everybody together. 

I think the other thing that OMB is very well-positioned and it 

plays to OMB’s strengths is to provide best practices and information across the agencies. And so, whether it is on the IT side and 

doing things like, in a portfolio stat, you go into an agency and you 

really look top to bottom, what kind of technology improvements 

can be made, but then OMB is in a position to actually cross-fertilize and make sure that the lessons learned from that particular 

intervention are actually available to the other agencies. 

And so, I think, in a very pragmatic way, we at OMB need to 

make sure that we are using that resource as effectively as possible 

and need input on how we can do that better. 

And then I think the third area really is in helping to set the 

priorities for the Federal Government because the policy process 

that OMB can oversee and the fact that we have responsibility for 

the budget framework as well means that is the opportunity to 

make sure they are full integrated and that when you are trying 

to identify these areas to make government more efficient and effective, that they are reflected in the budget that is out there as 

well. 

So I think there are several opportunities where OMB can and 

should play a vital role. But I agree with your basic premise that 

at the end of the day, to make real progress, we all have to be 

working constructively and pragmatically together. That is, again, 

if confirmed, something that I appreciate and I want to learn more 

about from you and others. 
22 

Chairman CARPER. As it turns out, GAO can be enormously helpful in this area. Every other year actually, GAO puts out something 

they call their High Risk List, and someone asked me once, what 

is the High Risk List. It is a compliation of high risk ways to waste 

taxpayer money. 

They have a lot of ideas and they involve the way we manage 

our data, they have the way we procure our weapon systems where 

they contract for all kinds of things, the way we handle our Federal 

property and dispose of Federal property or do not. I call the GAO 

High Risk List this Committee’s to-do list. 

And I would just suggest that for OMB, it is not a bad to-do list 

for the Administration. And again, it is so hard to get anything 

done around here, even if we agree on things, but if you have a 

particular set of policy initiatives that really could, arguably, save 

a fair amount of money and the Administration is not only just 

talking about it but putting it in their budget. 

And you have GAO in their High Risk List saying these are 

things we need to do, we have the Committees in the Senate and 

in the House that are doing proper oversight that includes matching up behavior of Federal agencies and so forth, their policies, 

measuring those against the high risks from GAO, and then finding folks within the IGs ranks, inspector general ranks, and then 

outside of government groups like Citizens Against Government 

Waste and other kinds of organizations. 

If you can put them all together you can get actually a synergy 

going here. And I think we are going to need that in a huge way 

if we are serious about deficit reduction. That is the third piece. 

I have people all the time who say to me, I do not mind paying 

more taxes, but I do not want you to waste my money. You would 

be amazed how often I hear that. I do not mind paying more taxes. 

I do not want you to waste my money. And if we realize that more 

revenue is part of the solution, not necessarily higher rates, if we 

realize that more revenue is part of the solution. We realize that 

they are not anxious to pay more in revenue or taxes, but if you 

do, we do not want you to waste that money. 

If we can convince clearly people that are determined to work on 

that front as well, I think we help ourselves and our country in the 

end. 

Among the items on GAO’s High Risk List many deal with building space. We own hundreds of thousands of pieces of property 

around the country and some of them are well-utilized, others are 

not. 

One of the things that troubles me—and Dr. Coburn focused on 

this almost as soon as he came to the Committee in 2005—was the 

way we lease space for Federal agencies to use when actually it 

would be more cost-effective to buy it. But if you buy it, you have 

to pay for it. You cannot, because we do not have a capital budget, 

you cannot basically write it off over time. You have to take it up 

right up front. A billion-dollar complex, its first year, you would 

have to offset it. That is a hard thing to do. 

Would you talk with us a little bit about that idea, a long-term 

lease versus actually paying something outright and how we deal 

with the scoring? Because the incentives are all wrong. It may be, 

in a lot of cases, more cost-effective to buy and to own than it is 
23 

to lease long term. Can you talk to us about the incentives there 

and how, if anything, we can and do need to do? 

Mr. DEESE. Sure. I mean, I think there is a real opportunity in 

better managing the Federal footprint, and I think there is an opportunity to actually generate savings, deficit reduction, but also to 

just operate our Federal facilities more efficiently and effectively. 

I think that the way to go about it is to think about how to create more tools to effectively manage this large footprint that we 

have. The issue that you mentioned is one of those tools. I think 

there are other tools that we should look at, and are there ways 

that agencies can swap facilities when that would be, an economic 

improvement for both agencies. 

I know that there is an initiative that has been undertaken to 

basically have PAYGO within an agency that says, you cannot expand in a new facility if you have not actually already looked at 

whether there are places where you need to consolidate. I think 

that is an effective forcing mechanism as well. 

I think if you put together these pieces and you look at what 

other pieces are out there, it is going to be those types of pieces 

together that are going to get us to a more efficient outcome, a 

more efficient management of the Federal footprint. 

It is a real opportunity and I think it is one that, if confirmed, 

I would want to work with you and your staff, as well as Dr. 

Coburn and his staff and others, to make sure that I fully understand exactly what type of tools are going to be the most effective, 

but I agree completely that we need more tools in the toolkit to try 

to go at this problem, and there is a real opportunity there. 

Chairman CARPER. Maybe one last question. One of the things I 

like to do at a hearing, usually I do it at a hearing when there are 

a number of witnesses and where we are trying to develop consensus around a particular issue. We were doing that last week on, 

among other things, improper payments and how to reduce them. 

I am going to ask you to give a closing statement, not a long one, 

but just some things you would like to mention, maybe reemphasize, or some thoughts that have come to mind that you did not 

have a chance to put in your original statement, so think about 

that, if you will. 

The job of government with respect to job creation is, people 

think sometimes their Senators think that they create jobs, or Governors create jobs, or Presidents create jobs, and I always say, No, 

we do not create jobs. What we do is help create the nurturing environment for job creation, which is workforce, infrastructure, access to capital, common-sense regulation. 

There are about 7 or 8 million jobs in the country that depend 

on a vibrant and cost-effective Postal Service and we have been 

wrestling for a couple years now to try to get it right in a day and 

age where you have people change very dramatically the way they 

communicate. 

As you know, first-class mail volume is way down. And that we 

still need a Postal Service. But I do not know if you have any 

thoughts about how to move us toward a vibrant, sustainable system where we can maybe maintain a unique distribution system 

that we have, but find ways to use that to generate more revenues, 

just to be more innovative. 
24 

But we need thoughts you have on the postal reform, which I 

think is going to be seriously addressed this spring and this summer. My hope is that we will be able to find common ground not 

only here in the Senate, but also in the House and with the Administration. 

Mr. DEESE. Well, I think it is an important area to find common 

ground because this is, as you say, a service that provides a vital 

service to Americans, but also, as currently structured, is 

unsustainable and if left unaddressed, is going to end up being a 

harder problem to solve and one that could potentially be a larger 

liability for taxpayers down the road. 

So I think this is the moment to try to take a very serious look 

at reform. And I know that the President’s budget has put forward 

an approach to reform. I know that others have thought very deeply about what the right approach to do that is. 

I do not have a particular magic formula in that respect, but I 

do think that the right way to go at this issue is to look for the 

areas of common ground and try to build a consensus, that if addressed now and in a sensible way, this will be easier. 

It is never going to be easy, but it is going to be easier now if 

we address this in a sensible way than if we leave it and wait and 

have to address a bigger problem down the road. 

Chairman CARPER. Good. Well, if you are confirmed, it is one of 

the first things that we are going to try to hammer out, we will 

certainly need your involvement and guidance and support in doing 

that. 

If you have a just brief closing statement you would like to offer, 

we are all ears. We would like to hear it. 

Mr. DEESE. Sure. Well, first of all, thank you for this hearing and 

again the opportunity to speak with you and with Senator Levin. 

I look forward to speaking with other Members of the Committee. 

And I guess in addition to what I have said, I guess I would just 

say this, that I understand that we face very serious challenges as 

a country, economic challenges and fiscal challenges, but I am also 

very energized by the opportunity ahead and the potential opportunity if confirmed for this role at OMB. 

And I think that in addition to the opportunity to work with a 

second-to-none professional staff at OMB, the opportunity to be 

part of a pragmatic group, as you said, this Committee and other 

stakeholders that you have identified, that are trying to actually 

just identify where can we find good ideas and how can we move 

forward to show the American people that we can be effective stewards of taxpayer dollars. 

We can do more with less, we can operate their government more 

efficiently. It is something that is extremely exciting for me and, 

again, I am very humbled and honored to be here and thank you 

for your time. 

Chairman CARPER. Well, we thank you for your time. We thank 

you for your willingness to take this on. I want to thank your mom 

and dad, David and Patricia, for raising you and your sister Heather to be so smart and to have good values and a good work ethic 

and good judgment in spouses. 

Kara, we are grateful for your willingness to share your husband 

with us. It is a sacrifice to do these kinds of things. We are mindful 
25 

it is not just a sacrifice on his part, but on yours as well. I am 

deeply grateful. And I look forward to working with you if confirmed, look forward to working with you closely going forward. 

I will close with the words I used earlier. A big part of what we 

need to do is find out what works and do more of that, find out 

what works and do more of that. And it is not any one person’s responsibility. It is not mine, it is not yours, it is not the responsibility of Sylvia Mathews Burwell, it is not the OMB Deputy for 

Management. It is everybody’s responsibility. 

And we look forward to finding those ideas that work and doing 

more of that and seeing if we cannot continue the progress we are 

making in getting this country moving in the right direction in 

terms of our economy, but also keeping our deficit moving in the 

right direction and that is down. We are anxious to get you on the 

job and at work so we can continue that progress. 

I understand, according to our crack staff back here, that the 

hearing record will remain open until close of business tomorrow. 

That is May 14 at 5 p.m. for the submission of statements and 

questions for the record. Have you had a chance to meet with most 

of the Members of our Committee? 

Mr. DEESE. I have had a chance to meet with some of them, yes. 

Chairman CARPER. Yes. You want to meet with as many of us 

as you can. Not everybody can. Some people serve on five Committees and they are—we are all busy. But I would urge you to make 

yourself as available as you can. That will help you, and in the end, 

it will help us to move your nomination along promptly. 

I think that is a wrap. Thank you so much. And with that, this 

hearing is adjourned. Thanks so much. 

[Whereupon, at 4:32 p.m., the hearing was adjourned.] 

(27) 

A P P E N D I X 

Opening Statement of Chairman Thomas R. Carper 

Nomination of Brian C. Deese to be 

Deputy Director, Office of Management and Budget 

May 13,2013 

As prepared/or delivery: 

Today we meet to consider the nomination of Brian Deese, President Obama's choice to serve as 

Deputy Director of the Office of Management and Budget. I am pleased to note at the outset of 

this hearing that the nomination process in this case is proceeding as it should. The position for 

which Mr. Deese is nominated became vacant in February of this year, when OMB Deputy 

Director Heather Higginbottom took a new assignment at the Department of State with incoming 

Secretary John Kerry. By early April the President submitted the nomination of Mr. Deese, and 

Dr. Coburn and I have worked to review and bring the nomination before the full Committee 

expeditiously. 

In terms of process, I think this nomination has worked well at both ends of Pennsylvania 

Avenue. And I hope it is a model that the White House and the Senate will continue to follow 

often. In recent decades, through both Democratic and Republican Administrations, the 

nomination and confirmation processes have become unacceptably slow. At any given time, 

there are far too many vacant senior positions throughout the federal government. This lack of 

critical leadership undermines the effectiveness of the government. And a slow, partisan process 

discourages talented people from wanting to serve in our government. 

This problem has become so prevalent that I have started referring to it as Executive Branch 

'Swiss Cheese.' And that is why I believe it is so important for our Committee to move forward 

promptly on nominations that fall within our jurisdiction. Nominations for the senior positions at 

the Office of Management and Budget are among the most important that our Committee will 

consider this year. 

As most of you know, on April 24, by a vote of96 to 0, the Senate confirmed the nomination of 

Sylvia Mathews Burwell to be Director of the Office of Management and Budget. She will be a 

strong leader, and now the President and the Senate share the job of surrounding her with a great 

team. 

Following today's consideration of Mr. Deese's nomination, we will soon consider the 

nomination of Howard Shelanski to be Administrator of the Office ofInformation and 

Regulatory Affairs. And I hope that in short order the President will submit a nomination for·the 

position of Deputy Director for Management, which was recently vacated by Jeff Zients. Having 

strong leadership at the Office of Management and Budget is important at any time, but 

particularly at this moment, when our nation is so desperately in need of a long-term budget plan 

to rein in our federal deficit and debt. 

I've said it before, but something this important bears repeating often. The grand budgct 

compromise that we need in order to address this fiscal crisis must have three essential elements. 
28 

It must address both spending and revenues in a balanced approach. It must rein in the costs of 

our entitlement programs in a way that doesn't savage the poor or the elderly. And it must 

ensure that, through better management of government programs, we deliver better services to 

the American people at a lower cost. 

This Committee is an important partner with the Office of Management and Budget in all of 

these areas, but especially in ensuring that our government achieves better results for less money. 

We have a full agenda, then, and Dr. Coburn and I are working in full partnership. For example: 

o We can save billions of dollars by shedding federal property that is no longer used. 

o We can save billions of dollars every year by reducing the amount of improper payments 

that the government makes. 

o We can bring in billions of dollars of revenues by doing a better job of collecting taxes 

that are owed but not paid. 

o We can save billions of dollars in federal contracting every year through efforts such as 

the so-called strategic sourcing initiative, which involves buying more in bulk. 

o We can save billions of dollars through better management of the information technology 

that the government buys. 

o We can improve the transparency of government spending so that the American people 

have a better understanding of how their tax dollars are used. 

These are just a few examples of the ways this Committee and the Office of Management and 

Budget, in concert, are striving to make our government work better. 

"I am that we have before us today a nominee who has a firm grasp of the role of both the "M" 

and the "B" in OMB. With respect to the "M" - the management - Mr. Deese understands the 

importance of driving innovations and efficiencies across the government so that agencies not 

only save money, but deliver better services to the American people. And with respect to the 

"B," he is someone who is committed to achieving a comprehensive deficit reduction plan that 

will help our economy grow. 

Mr. Deese comes well-prepared for these challenges from his two positions at the National 

Economic Council - first as a Special Assistant to the President for Economic Policy and then as 

Deputy Assistant to the President and Deputy Director ofthe National Economic Council. Mr. 

Deese has earned a well-justified reputation as someone who can absorb a tremendous amount of 

economic data, synthesize it, and translate it into viable options for the President and his 

economic team. On issues ranging from the auto bailout to housing issues to tax policy, Mr. 

Deese has helped our country recover from the recession that hit our economy before President 

Obama took office. He is someone who understands that our fiscal policies are intrinsically 

linked to the prosperity of the American people. 

Brian's father is a college professor and his mother is an engineer. He clearly has inherited their 

smarts. He has an undergraduate degree from Middlebury College and a law degree from Yale 

Law School. Before going to law school, he spent time doing policy analysis for the Carnegie 

Endowment for International Peace, the Center for Global Development, and the Center for 

American Progress. 
29 

I think anyone who meets Brian quickly realizes that he has the brainpower to pursue whatever 

profession he chooses. But he has a passion for public policy - specifically, a passion for finding 

ways for our government to make smart choices so that individuals and businesses can prosper. 

In short, he is someone who quickly impressed his colleagues in the Administration, and I 

believe he will quickly impress my colleagues in the Senate. 

### 
30 

Opening Statement of Senator Tom Coburn 

Nomination of Brian C. Deese to be 

Deputy Director, Office of Management and Budget 

May 13,2013 

We are here today to consider the President's nominee for Deputy Director of the Office of 

Management and Budget ("OMB"), Mr. Brian Deese. 

Mr. Deese, if confinued, will assume the role of second-in-command at the OMB. Strong 

leadership at the nation's chief budget office is needed now more than ever, as we face a lagging 

economy, record levels of a spending and borrowing, and a $16.8 trillion debt. 

Washington is nearing a fiscal crossroads and many crucial decisions will be made in the coming 

months. If confinued, Mr. Deese will be part of these discussions, as Congress and the 

administration work together to address various budget and economic issues, including 

sequestration, the national debt limit, entitlement and tax refonu, and many others. It is my 

hope, if given this opportunity, Mr. Deese will commit to working diligently to find serious and 

bipartisan solutions to the pressing budgetary and management challenges that lay ahead. 

Mr. Deese began working for the President as a member of his campaign. Since that time, he 

has handled number of economic, budget, and domestic policy initiates for this administration. 

If confinued for this role at the OMB, it will be imperative Mr. Deese take a pragmatic approach 

to resolving the nation's fiscal challenges, working with me and other members of Congress to 

find areas of common ground for savings and refonu. We can no longer afford for Washington 

insiders to engage in partisan bickering while retreating from making tough fiscal choices. 

A number of areas within the OMB's management portfolio are ripe for refonu. The agency is 

uniquely positioned to work across the government to achieve significant savings from every 

comer of the federal bureaucracy through management and operational improvements. The 

OMB should take the lead for the executive branch in implementing many of these refonus, 

governmentwide, while also working with Congress to assure the penuanency of these changes. 

In many cases, these refonus, such as reducing improper payments, improving grant 

management and the procurement process, or even simply eliminating excessive travel and 

conference attendance, will not only modernize government and increase efficiency, but also 

produce budgetary savings needed to mend our country's fiscal situation. 

For example, just last month the Government Accountability Office (GAO) released its third 

annual duplication report. This one review identified $95 billion in potential savings to 

taxpayers over 17 areas of the government and 14 areas of potential cost savings. Both Congress 

and the administration have fallen short in implementing GAO's recommendations, which could 

bring about significant savings and reduce federal spending. If he assumes the role of Deputy 

Director, I expect Mr. Deese to work with us on this initiative and other commonsense, 

bipartisan areas of government refonu. 
31 

While I disagree with many of this administration's policies, I will continue to look for every 

possible opportunity to find common ground. The Senate recently confirmed Mrs. Sylvia 

Burwell to be Director of the OMB. I committed to working with Director Burwell to find 

commonsense solutions to streamline government and reduce our nation's deficit. If confirmed, 

I ask Mr. Deese to join in that commitment and make it his top priority. 
32 

STATEMENT OF BRIAN C. DEESE 

Nominee to Serve As 

Deputy Director of the Office of Management and Budget 

UNITED STATES SENATE COMMITTEE ON HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

May 13,2013 

Thank you Chairman Carper, Ranking Member Coburn, and Members of the Committee for 

welcoming me today. It is an honor to be considered by this committee as the President's 

nominee to be Deputy Director of the Office of Management and Budget (OM B). 

I am pleased that members of my family could join me today, including my mother and father 

who instilled in me a deep respect for, and commitment to, public service. I particularly want to 

recognize my wife, Kara, and our daughter Adeline, who are here as well. 

I would also like to thank President Obama for nominating me to this position and to Director 

Burwell for her support and confidence in me. If confirmed, I will work hard to meet their high 

standards of performance on behalf of the American people. 

Finally, I want to thank Members of the Committee and their staff for taking the time to meet 

with me over the last few weeks. If I am confirmed, I look forward to continuing our 

conversations and strengthening the vital relationship between OMB and this Committee. 

Over the past several years, I have had the opportunity to work with many officials at OMB and 

across executive branch agencies to develop and implement Administration policies. This 

experience has given me a deep respect for the role that OMB plays in setting budget priorities 

and improving government performance, and for the skill and commitment of the professionals 

who work there. 

[ am humbled to be considered for this position at a moment when we as a Nation face the 

critical work of strengthening our economy and improving our fiscal position. We have made 

important progress over the last several years. Our economy is growing, our housing market is 

recovering, and our manufacturing sector is showing signs of strength. Our businesses are 

creating jobs on a consistent basis and together, Congress and the President have begun the hard 

work of bringing down our deficits and strengthening our Nation's long-term financial position. 

But there is much more that we need to do together to deliver on what I believe must be our 

ultimate goal-an economy that provides opportunity and stability for working families. 

Much of my professional work has focused on the role that fiscal policy can play in promoting 

stronger and more durable economic growth. If confirmed, my focus will be to work closely with 

Director Burwell and Congress to build on the progress we have made and further reduce our 

deficit in a balanced way that supports a stronger economy over the short- and long-term. 
33 

A second key area of focus in this period of ongoing fiscal and economic challenges must be to 

make our Government more effective and efficient. Over the last several years, most recently as 

Deputy Director of the National Economic Council, I have developed a deep appreciation for the 

importance of applying sound management practices across the Federal Government. This is an 

area where this Committee has shown great leadership, and if confirmed, I look forward to 

working with you to make progress on our many shared priorities. 

Finally, I believe the Budget is fundamentally a vision for how Government and those of us in 

public service can deliver better outcomes for our economy and middle class families. It is, in 

essence, a reflection of our values and priorities as a country. If confirmed, I will work every day 

to uphold those values and priorities. 

I want to thank the Committee for its time today and for considering my nomination. I look 

forward to answering your questions. 

2 
34 
35 
36 
37 
38 

(B) List any advisory, eonsultative, honorary or other part-time service or positions with 

federal, state, or local governments, not listed elsewhere. 

None 

4. Potential Conflict of Interest 

(A) Describe any business relationship, dealing or rmandal transaction which you have had 

during the last to years, whether for yourself, on behalf of a client, or acting as an agent, 

that could in any way constitute or result in a possible conflict of interest in the position to 

which you have been nominated. 

In connection with the nomination process, I consulted with the Office of Government Ethics 

and the Office ofManagernent and Budget's designated agency ethics official to identifY 

potential conflicts of interest. Any potential conflicts of interest will be resolved in accordance 

with the terms of an ethics agreement that I entered into with OMB's designated agency ethics 

official and that has been provided to this Committee. 

(B) Describe any activity during the past 10 years In which you have engaged for the 

purpose of directly or indirectly lnfiuencIng the passage, defeat or modification of any 

legislation or affecting the administration or execution of law or public policy, other than 

while In a federal government capadty. 

I have not engaged in any such activity; however, I previously worked for organizations that took 

advocacy positions with respect to legislation and public policy, including the Center for 

American Progress, Center for Global Development and Carnegie Endowment for International 

Peace. 

S. Honors and Awards 

List all seholarships, fellowships, honorary degrees, civilian service citations, military 

medals, academic or professional honors, honorary sodety memberships and any other 

special reeognition for outstanding service or achievement. 

• Fortune Magazine, "40 under 40", 2011, 2012. 

• Young Leader Award, American-Swiss Foundation, 2002. 

• Junior Fellow, Carnegie Endowment for International Peace, 200Q..200l. 

• Middlebury International Studies Senior Thesis Award, 2000. 

6. Memberships 

List all memberships that you have held In professional, soeial, business, fraternal, 

scholarly, elvie, or charitable organizations In the last 10 years. 

5 
39 
40 
41 

"Whatever Happened to Debt Relief International Herald Tribune 612712002 

fOT Africa?" (with Nancy Birdsall) 

"Multilateral Development Banks in Ilconomic Perspectives 2001 

a Changing Global Economy." (with Nancy Birdsall) 

(C) List any formalspeeclles you have delivered during the last five years and provide the 

Committee with copies of those speeches relevant to the position for which yon have 

been nominated. Inclnde any testimony to Congress or any other legislative or 

administrative body. These items can be provided eleetronicaUy vla e-mail or other 

digital format. 

In my role at the National Economic COtmcil, I occasionally taped videos on the 

Administration's positions on economic policy. Those videos are available at: 

http://www.whitebouse.gov/whiteboard. 

Also, over the past five years, I gave informal remarks on the Administration's economic 

policies to stakeholder groups and public audiences. I did not prepare remarks for these 

appearances and am not aware that transcripts of them exist. To the best of my 

recollection, below is a listing of those informal remarks: 

• Participant in Post- State of the Union White House panel, 2112/13 

• Participant in Discussion on Atlantic Magazine Forum on Energy Innovation, 

1124/13 

• Remarks on Budget to 2013 Legacy Conference Obama Campaign Legacy 

Conference, 1120/13 

• Participant in panel at White House Housing Policy Forum, 9/13/12 

• Remarks at Senate Staff Briefing on Small Business Jobs and Tax Relief Act, 

6/21112 

• Remarks on NEC policy agenda at White House briefingfor State Treasurers, 

3/19/12 

• Remarks on NEC policy agenda to White House Business, 3/16/12 

• Remarks on Administration Housing policy to House Financial Services staff, 

219/12 

• Remarks on Administration Housing policy to Senate staff, 218112 

• Participant in Post- State of the Union White House panel, 1/24/12 

• Remarks on NEC policy agenda at Green Government Symposium, 11/1/11 

• Participant in panelfollowing the President's Joint Session Address on the 

America Jobs Act, 9/8/11 

• Remarks on Administration housing policy at National Association of Real Estate 

Investment Trusts (NARElT) Board of Governors meeting. 3/1111 

• Remarks on NEC policy agenda to Brookings institution Budget Luncheon. 

2118/11 

8 
42 

• Remarks on NEC policy agenda at Atlantic Magazine Digital Town Hall on 

Economy & Jobs. 2/8/11 

• Participant in Post- State of the Union White House panel, 1/25/11 

'" Remarks on NEC policy agenda to panel on How the White House Works, 

03/04110 

• Participant in Post- State of the Union White House panel, 1127/10 

9. Criminal History 

Since (and including) your 18tb birthday, has any of the (oUowing happened? 

• Have you been issued a sutnmollS. citation, or ticket to appear in court in a criminal proceeding against you? 

(Exclude citations involving traffic infractions where the fine was less than $300 and did not include alcohol or 

drugs.) 

No. 

• Have you been arrested by any police officer, sheriff, marshal or any other type of law enforcement official? 

No. 

• Have you been charged, convicted, or sentenced of a crime in any court? 

No. 

• Have you been or are you currently on probation or parole? 

No. 

Are you currently on trial or awaiting a trial on criminal charges? 

No. 

• To your knowledge, have you ever been the subject or target of a federal. state or local criminal investigation? 

No. 

If the answer to any of the questions above is yes, please answer the questions below for 

each criminal event (cltation, arrest, investigation, etc.). If the event was an investigation, 

where the question below asks for information about the offense, please offer information 

about the offense under investigation (If known). 

A) Date of offense: 

a. Is this an estimate (Yes/No): 

B) Description of the specific nature of the offense: 

C) Did the offense involve any of the following? 

9 
43 

1) Domestic violence or a crime of violence (such as battery or assault) against your child, dependent, 

cohabitant, spouse, former spouse, or someone with whom you share a child in common: Yes/No 

2) Firearms or explosives: Yes / No 

3) Alcohol or drugs: Yes I No 

D) Location where the offense occurred (city, county, slate, zip code, country): 

E) Were you arrested, summoned, cited or did you receive a ticket to appear as a result of this offense by any 

police oftlcer, sheriff, marshal or any other type of law enforcement official: Yes I No 

I) Name of the law enforcement agency that arrested/cited/summoned you: 

2) l.ocation of tbe law enforcement agency (city, county, state, zip code, country): 

F) As a result of this offense were you charged, convicted, currently awaiting trial, andlor ordered to appear in 

court in a ,criminal proceeding against you; Yes I No 

1) If yes, provide the name of the court and the location of the court (city, county, state, zip code, 

country): 

2} If yes, provide all the charges brought against you for this offense, and the outcome of each charged 

offense (such as found guilty, found not-guilty, charge dropped or "nolle pros," etc). If you were found 

guilty of or pleaded guilty to a lesser offense, list separately both the original charge and the lesser 

offense: 

3) If no, provide explanation; 

0) Were you sentenced as a result of this offense: Yes INo 

H) Provide a description of the sentence: 

n Were you sentenced to imprisonment for a term exceeding one year: Yes I No 

1) Were you inoarcerated as a result of that sentence for not less than one year: Yes I No 

K) If the conviction resulted in imprisonment, provide the dates that you actually were incarcerated: 

L) If conviction resulted in probation or parole, provide the dates of probation or parole: 

M) .Are you currently on trial, awaiting a trial, or awaiting sentencing on criminal charges for thLq offense: Yes I 

No 

N) Provide explanation: 

10 
44 

10. Civll Litigation and Administrative or Legislative Proceedings 

(A) Since (and including) your 18th birthday, bave you been a party to any public record 

civil co.rt action or administrative or legislative proceeding of any kind that resulted In (1) 

a f"mdlng of wrongdoing against you, or (2) a settlement agreement for you, or some other 

person or entity, to make a payment to settle allegations against you, or for you to take, or 

refrain from taking, some action. Do NOT include small claims proceedings. 

I have not. 

(B) In addition to those listed above, have you or any business ofwbich you were an officer, 

director or owner ever been Involved as a party of interest in any administrative agency 

proceeding or civil litigation? Please identify and provide details for any proceedings or 

civil litigation that involve actions taken or omitted by you, or aileged to have been taken or 

omitted by you, wbUe serving In your official capacity. 

I have not. 

(C) For responses to tbe previous question, please identify and provide details for any 

proceedings or civil Utigation that involve actions taken or omitted by you, or aileged to 

bave been taken or omitted by you, while serving In your official capacity. 

None 

11. Breach of Professional Ethics 

(A) Have you ever been disciplined or cited for a breacb of ethics or unprofessional conduct 

by, or been the subJeet of a complaint to, any court, administrative agency, professional 

association, disciplinary committee, or other professional group? Exclude eases and 

proceedings already listed. 

No 

(B) Have you ever been fired from a Job, quit a Job after being told you would be fired, left 

a job by mutual agreement foUowing charges or ailegatlons of misconduct, left a Job by 

mutual agreement foUowing notiee of unsatisfactory performance, or received a written 

warning, been officially reprimanded, suspended, or disdpllned for misconduct in the 

workplace, sueb as violation of a security policy? 

No 

12. Tax Compliance - REDACTED 

(fbls information will not be publisbed In the record of the bearing on your nomination, 

but it will be retained in the Committee's tlIes and will be available for public inspection.) 

11 
45 

13. Lobbying 

In the past ten years, have you registered as a lobbyist? If so, please indicate the state, 

federal, or loeal bodies with which you have registered (e.g., House, Senate, California 

Secretary of State). 

No 

14. Outside Positions 

X See OOB Fonn 278. (If, for your nomination, you have completed an OGB Form 278 

Executive Branch Personnel Public Financial Disclosure Report, you may check the box here to 

complete this section and then proceed to the next section.) 

For the preceding ten calendar years and the current calendar yellr, report any positions 

held, whether compensated or not. Positions include hut are not limited to those of an 

officer, director, trustee, general partner, proprietor, representative, employee, or 

eonsultant of any corporation, firm, partnership, or other business enterprise or IIny nonprofit organization or educational institution. Excludlr positions with religious, social, 

fraternal, or political entities and those solely of an honorary nature. 

15. Agreements or Arrangements 
46 
47 
48 
18. Liabgities 

X See OGE Form 278. (If, for your nomination, you have completed an OGE Form 278 Executive Branch Personnel Public Fin

Disclosure Report, you may check the box here to complete this section and then proceed to the next section.) 

For the preceding calendar year and the current calendar year up to a date you choose that is within 31 days of the date o

report liabilities over $10,000 owed to anyone creditor at any time during the reporting period by you, your spouse, or 

dependent children. Check the highest amount owed during the reporting period. 

Exclude: 

1. a personal liability owed to a spouse or dependent cbild, or to a parent, brother, sister, or child of you, your spo

dependent child; 

2. a mortgage or home equity loan secured by real property which is the personal residence (or a second residence 

used for producing income) of you or your spouse; 

3. a loan secured by a personal motor vehicle, household furniture, or appliances, where the loan does not exceed t

purchase price of the item; 

4. a revolving charge account where the outstanding liability did not exceed $10,000 as of the close of the reporting 

and 

5. any liability of your spouse or dependent child which represents the sole financial interest or responsibility of th

or child, and about which you have no knowledge, and which is not derived from your income, assets, or activities

concerning which you neither derive nor expect to derive any financial or economic benefit. 

You are required to report any liability of any nonpublic company, investment pool, or other entity, in which you, your s

dependent child have an interest, unless (1) the liability is incidental to the primary trade or business of the entity as indi

yon on Sehedule A, or (2) the entity is an excepted investment fund. An excepted investment fund is a mutual fund, COIIIJ

trust fund of a bank, pension or deferred compensation plan, or any other investment fund, which is widely held; publicl

(or available) or widely diversified; and under circumstances where you ncither exercise control over nor have the ability 

exercise control over the fmancial interests held by the fund. A fund Is widely diversified when it holds no more that 5% 

18 
50 
51 
52 

,> 

~) 

l) 

,' . 

• > 

. 

, 

. 

" 

,~, . 

..... 
53 

U.S. Senate Committee on Homeland Security and Governmental Affairs 

Pre-hearing questionnaire for the nomination of 

Brian Deese to be 

Deputy Director, Office of Management and Budget 

I. Nomination Process and Conflicts of Interest 

1. Why do you believe the President nominated you to serve as Deputy Director of the 

Office of Management and Budget (OMB)? 

I believe the Prcsident nominated me to this position because of my experience working 

at the National Economic Council over the past several years, most recently as Deputy 

Director. 

2. Were any conditions, express or implied, attached to your nomination? If so, please 

explain. 

No. 

3. What specific background and experience affirmatively qualifies you to be OMB Deputy 

Director? 

I have over ten years of experience working on economic and budget policy issues. Most 

recently, as Deputy Director of the National Economic Council, I was responsible for 

coordinating economic policy development across the Administration. In this role, I bad 

the opportunity to work closely with officials at the Office of Managernent and Budget 

(OMB) and was involved in the development of each of the President's Budgets. 

4. Have you made any commitments with respect to the policies and principles you will 

attempt to implement as OMB Deputy Director? If so, what are they and to whom have 

the commitments been made? 

No. 

5. If confmned, are there any issues from which you may have to recuse or disqualifY 

yourself because of a conflict of interest or the appearance of a conflict of interest? If so, 

please explain what procedures you will use to carry out such a recusal or 

disqualification. 

Senate Homeland Security and Governmental Affairs Committee 10f30 
54 

In connection with the nomination process, I consulted with the Office of Government 

Ethics and OMB' s designated agency ethics official to identify potential conflicts of 

interest. I would resolve any potential conflicts of interest in accordance with the terms 

of an ethics agreement that I cntered into with OMB's designated agency ethics official 

and provided to this Committee. I am not aware of any other potential conflicts of 

interest. 

II. Background ofthe Nominee 

6. What specific background and experience do you bring to the various roles that you 

would assume as Deputy Director? 

I have over ten years of experience working on economic and budget policy issues, both 

inside and outside of government. Most recently as Deputy Director ofthc National 

Economic Council, I have been responsible for coordinating economic policy 

development across the Administration. I have managed the Administration's policy 

development and presented options to the President across a range of areas, organizing 

and leading the planning of the Administration's priorities in housing, manufacturing, 

financial regulation, and other areas. In this role, I have had the opportunity to work 

closcly with the leadership and c<rreer staff at OMB and have been involved in the 

development of each of the President's Budgets. 

I have also worked to implement budget policies and measures to improve the 

performance and effectiveness of government programs and services. I have worked to 

develop more effective ways for the government to partner with the private sector to 

promote job creation and growth, and have also had the opportunity to work with 

Congress to design and implement legislation to improve economic growth and 

strengthen our nation's fiscal position. 

These experiences have given me a strong understanding of the Federal budgeting 

process and an appreciation for the role of sound fiscal policy as part of a broader 

strategy to promote economic growth and job creation. I believe I can apply these skills 

and experiences effectively to the role of Deputy Director at OMB. 

III. Role of the Director of OMB 

7. What do you anticipate will be your greatest challenges as OMB Deputy Director, and 

identify, at least, your top three priorities and how you plan to address them? 

Senate Homeland Security and Governmental Affairs Committee 20f30 
55 

The greatest challenge the Nation faces today is encouraging strong, durable economic 

growth that generates good jobs and greater economic security for middle class 

Americans. A key priority for me, if confirmed, would be supporting the President's 

efforts to find common ground on a comprehensive deficit reduction strategy that 

improves our long term fiscal position while supporting the reform and investments our 

economy needs to grow. 

A second priority for me is ensuring that the Federal government soundly manages its 

finances, particularly in thcsc tight budgetary times. That means spending money wisely, 

rooting out any wasteful or inefficient spending, preventing fraud or abuse before it 

occurs, and looking for ways to create a higher perfurming, more effective government. 

A third priority, if confirmed, would be to work with Director Burwell to strengthen 

OMB as an institution. OMB plays a unique and integral role in promoting sound 

budgeting and improving the performance of government. Maintaining OMB's ability to 

execute on this role, even in a challenging fiscal environment, would be a key area of 

focus for me. 

8. How do you envision your functions and responsibilities as Deputy Director? Have you 

and OMB Director Sylvia Burwell discussed what your role would be? If so, please 

describe how you view your role in light of those discussions. If you discussed specific 

programs or areas you will be working on, please identifY those as well. 

Director Burwell and I have had several conversations about my role, if confirmed. We 

have a shared understanding of the key functions of the Deputy Director. First, I would 

work in close partnership with Director Burwell to develop a budget that furthers the goal 

of comprehensive deficit reduction and economic growth. Second, I would facilitate 

policy coordination among Federal agencies and the Executive Office of the President, 

and help oversee internal management ofOMB. Third, Director Burwell and I would 

work closely with the Deputy Director for Management (DDM) in setting goals for 

improving the effectiveness and efficiency of government, and executing on those goals. 

I believe that a close partnership between the Deputy Director and the DDM is 

particularly important in delivering results and improving government performance. 

9. In many agencies, the Deputy is charged with internal management of the agency. Do 

you expect to take on this role at OMB? If so, what do you see as the major internal 

management challenges there, and how would you plan to address them. Please explain 

the system or standard you intend to use to measure success or identify problems. Also, 

please cite your specific experience that qualifies you to serve as Deputy Director of the 

largest office within the executive office of the President. 

Senate Homeland Security and Governmental Affairs Committee 30f30 
56 

If confinued, I envision working closely with Director Burwell on setting overall 

priorities and goals for OMB's internal management, and taking a lead role in 

implementing that vision, working closely with the other senior members of OMB's 

management team. If confinued, a top priority would be to continue OMB's strong 

record of attracting and retaining highly qualified staff, even in an cxtremely difficult 

budget environment. In addition I would work to make sure that there is regular and 

effective communication between OMB's career staff and the Agency's leadership, and 

that we are setting clear goals as an institution and holding ourselves accountable for 

achieving outcomes. . 

As stated in Question 6, I have over ten years of experience working on economic and 

budget policy issues, both inside and outside of government. I have had the opportunity 

to work closely with both senior officials and career staff at OMB and have been 

involved in the development of each of the President's Budgets. I have also worked to 

implement budget policies and measures to improve the perfonuance and effectiveness of 

government programs and services. I have worked to develop more effective ways for 

the govemment to partner with the private sector to promote job creation and growth, and 

have also had the opportunity to work with Congress to design and implement legislation 

to improve economic growth and strengthen our nation's fiscal position. I believe I can 

apply these skills and experiences effectivcly to the role of Deputy Director at OMB if 

confinued. 

10. How do you view your role as Dcputy Director in relation to OMB's three statutory 

offices: the Office of Federal Financial Management (OFFM), the Office of Federal 

Procurement Policy (OFPP), and the Office ofInfonuation and Regulatory Affairs 

(OIRA)? 

Each ofthese statutory offices plays a critical role in the effective management and 

operations of government, as well as in the institution of OMB. OFFM helps guidc 

Federal agencies on appropriate financial stewardship oftaxpayer resources, from 

managing real estate, to reducing improper payments, to ensuring effective management 

of Federal grants. OFPP serves as the primary office fbr overseeing the government's 

contracting policies. As the Federal government is the nation's largest purchaser, this 

role is critical to ensuring that our buying practices deliver the best value for taxpayers. 

And OIRA oversees regulations across the government, making sure that they are 

necessary, appropriate, and cost-effective, while also minimizing any burden on 

businesses and individuals. If confilmed, I would work closely with the Director and 

DDM to help set overall priorities and goals for financial management, contracting, and 

other cross-cutting priorities of these important offices, focus on delivering results against 

these goals, and make sure that these priorities are coordinated with and are reflected in 

the aunual budget process. 

Senate Homeland Security and Governmental Affairs Committee 40f30 
57 

11.0MB is often tasked to facilitate cooperation or coordination between agencies in areas 

such as information technology, financial management, procurement, performance, 

reducing waste, increasing governmental efficiency, and human resources. Do you 

anticipate having a role in overseeing or assisting OMB in this undertaking if you are 

confirmed to be the Deputy Director? What in your experience do you believe has helped 

prepare you to fulfill this function? 

If confirmed, I would work closely with the Deputy Director for Management to facilitate 

cooperation and coordination in information technology, financial management, 

procurement, performance, and human resources. For OMB's efforts in these areas to bc 

effective, it is important that the OMB leadership maintain strong relationships with the 

agencies based on shared goals, trust, and transparency. In my role as Deputy Director at 

the National Economic Council, I had the opportunity to oversee development and 

implementation of key Administration policy priorities across agencies in the executive 

branch. Through this experience, I have developed strong relationships with agencies 

across government and an understanding of how to work with agencies to deliver results. 

IV. Policy Questions 

General Management 

12. What do you see as the top priorities in terms of management challenges facing the 

federal government, and, if confirmed as OMB Deputy Director, what would you do to 

address those challenges? 

One of our greatest challenges in these tight and uncertain budgetary times is to ensure 

that the Nation has a high-performing and effective government that is able to carry out 

its mission on behalf of the public and make the best use oflimited resources. That 

means being innovative in our thinking in areas such as personnel practices, preventing 

waste, fraud, and abuse, downsizing our footprint of facilities and data centers, getting 

more value for our contracting dollars, and harnessing teclmology to increase 

productivity and customcr service. I also think that placing greater focus on using 

evidence in budgeting will make sure that the Federal government is spending finite 

resources most effectively. OMB placed significant emphasis on this priority in last 

year's budget process, and I would look forward to continuing this cornmitment in future 

years, if confirmed. 

Senate Homeland Security and Governmental AjJairs Committee 50f30 
58 

13. One ofOMB's goals, as stated in its strategic plan, is to improve the effectiveness and 

efficiency of govermnent programs. What OMB initiatives, through its statutory and 

resource management offices, can make the greatest difference in govermnental 

efficiency and effectiveness? How can those efforts be integrated with the budget process 

and with the work of congressional authorizing and appropriating cormnittees? Please 

explain how you believe OMB should ensure agencies comply with OMB's 

govermnentwide initiatives. 

OMB is currently taking a number of steps to increase efficiency and effectiveness, 

which I would continue to advance and seek to strengthen, if confirmed. I believe that 

the work underway to increase the use of evidence and evaluation in designing and 

budgeting for programs has the potential to substantially improve govermnent 

performance. Evidence-based decision-making helps us to maximize the return on 

investment in programs, ensuring that the Federal govermnent is focusing resources on 

programs that work rather than those that do not. Through the budget process, OMB and 

Federal agencies must also continue to identify areas where duplication, overlap, or 

fragmentation present opportunities to cut, consolidate, or save money and also improve 

performance and effiCiency. The President's 2014 Budget proposes over 200 such 

actions, which would generate $25 billion in savings. 

Additionally, I also see the use of technology as an opportunity to help government 

agencies do more with less. Buying smarter when it comes to cormnodity information 

technology (IT) services, and more generally, allows the Federal government to leverage 

its purchasing power and get the best value for the taxpayer's dollars. 

The Administration will continue to work closely with congressional committees to 

improve efficiency and find ways to do more with less, both through legislation and 

oversight. OMB will also continue to provide direction to agencies on critical crossagency goals such as improved procurement practices, better real estate management, and 

effective use of IT. That means setting clear goals and metrics for improvements in 

efficiency and effectiveness in all of these areas, and holding agency leaders accountable 

for meeting those goals. If confirmed, I would look forward to working closely with 

Congress, and particularly this Cormnittee, on efforts to improve govermnent 

effectiveness and effiCiency, and ensure that all agencies are working together on this 

critical cffort. 

14. In light ofthe serious budgetary challenges facing the govermnent, what are the most 

important steps that OMB can take to enable thc fcderal govermnent to perform its 

essential functions as well as or better and at less cost? Please explain any system or 

standard you intend to use to measure success or identify problems. 

Senate Homeland Security and Governmental Affairs Committee 60f30 
59 

The first is driving agencies to improve performance by setting goals, establishing 

processes for tracking progress on meeting those goals, and holding agency leadership 

accountable for outcomes. Goal-setting, backed up by hard data, evidence, and scniorlevel accountability, can be instrumental in increasing productivity in any environment, 

including goveroment. This Administration is putting in place a series of goals for 

specific programs, as well as across agencies, in ordcr to appropriately measure success 

and hold ourselves accountable for achieving it. This is the framework envisioned by the 

GPRA Modemization Act, and it is one that I believe can be effective in driving progress 

on some of our most important priorities as a country. 

A second way OMS can help agencies perform better is by identifying ways to help them 

cut costs and increase efficiency. OMS is already taking a number of actions, like 

pushing agencies to pool their buying power through strategic sourcing to get better value 

out of contracting dollars, or helping agencies identify commodity IT investments that 

they should get rid of through the "PortfolioStat" process. There are also' more things 

OMS can do, such as getting agencies to work together to consolidate real estate assets 

that are in close proximity to each other, or identify new and innovative ways to 

streamline the Federal personnel system. If confirmed, I look forward to working with 

OMS's management offices, agency leadership, and Congress, to continue progress on 

these and other areas, 

Management for Performance and Results 

15. The Goveroment Performance and Results Act (GPRA), as updated in 20t 0 by the 

GPRA Modernization Act (GPRAMA) (P .L.lll-352), provides a government-wide 

framework for managing performance. If confirmed, how would you see your role in 

implementing the requirements of the GPRA Modernization Act, including helping to 

enhance agency strategic and annual planning? 

The GPRA Modernization Act establishes a framework for achieving significant 

performance improvements across government. This foundation uses specific goals, 

data, and other evidence to inform decisions to improve outcomes and increase 

productivity. In implementing this framework, I see OMB's role as providing clear 

guidance and assistance to agencies in setting ambitious goals with specific progress, and 

thcn challenging senior officials across agencies to measure progress, and continuously 

innovate to improve outcomes against those goals. As we continue to implement the 

GPRA Modemization Act, I look forward to working with Congress, as well, to achieve 

better outcomes for the American taxpayers. 

Senate Homeland Security and Governmental Affairs Committee 70[30 
60 

16. The GPRA Modernization Act of2010 seeks to improve collaboration on performance 

measurement and evaluation among agencies, which is necessary to achieve common 

outcomes across the government. OMB is the focal point for overall management in the 

executive branch agencies, so it plays a key role in providing leadership and direction to 

federal agencies' collaborative efforts. 

a. What role, if any, should the OMB Deputy Director play in ensuring that OMB 

focuses attention on additional areas in need of greater collaboration? 

If confirmed, I would work closely with the Director, Deputy Director for Management, 

and my colleagues across the Administration to determine areas where increased 

collaboration would improve results. OMB, in its role overseeing government-wide 

management practices, is uniquely qualified to not only identify areas for collaboration, 

but also make sure that successful cross-agency collaborations are effectively 

incorporated in the budgct process. 

The GPRA Modernization Act is an important tool that helps us identify cross-cutting 

challenges and priorities, and if confirmcd, I would support the actions that OMB is 

taking to identify those issues requiring the engagement of multiple agencies. For 

example, significant work has been done by this Administration in establishing fourteen 

Cross-Agency Priority Goals in areas such as exports, cyber security, and real estate 

savings. Success in each of these areas requires contributions from multiple Federal 

agencics, and they represent some of the most critical challenges and priorities for the 

country. 

Separately, I see the inter-agency Performance Improvement Council, which is chaired 

by the Deputy Director for Management, as a means through which to facilitate 

coordination and collaboration across agencies. By serving as a central repository for 

performance goals and practices, the Council can help guide agencies, collectively and 

individually, towards improved outcomes for the public. 

b. Do you believe that it is within the OMB Deputy Director's purview to reinforce 

agency and individual accountability for collaborative efforts? If yes, how do you 

plan to do so if confirmed? 

Yes, if confirmed, as part of the OMB leadership team, I would work to foster a culture 

of accountability for results, within and across agencies. If confirmed, I would work with 

the OMB Director and Deputy Director for Management and leaders across the Federal 

government, to find ways to boost agencies' shared responsibility to work together to 

achieve collaborative and interdisciplinary goals. This would include work on crosscutting initiatives such as those described above. 

Senate Homeland Security and Governmental Affairs Committee 80f30 
61 

17. At the beginning of each Congress, the Government Accountability Office (GAO) 

publishes a "High Risk" report identifying government operations that are particularly 

vulnerable to fraud, waste, abuse, and mismanagement or that need transformation to 

address particular management challenges.l If confirmed as Deputy Director, to what 

extent, if any, would you focus agencies' attention on those programs on the High Risk 

List, and what typcs of actions will you require agencies to take to address High Risk List 

issues? Please identify the programs on the high-risk list you feel you can be most 

effective in addressing. 

GAO's bi-annual High Risk List helps identify and address some of the most important 

and complex challenges facing the Federal government, such as oversight of food safety 

or the management of Federal real property. I understand that OMB has in place a 

process to regularly convene key agency officials and GAO to discuss High Risk List 

items and ensure continued progress in addressing them. For example, OMB worked 

closely with Federal agencies to improve interagency contracting processes, which led to 

the removal of that item from GAO's list this year, and OMB looks forward to continuing 

to improve the government's contracting practices. Similarly, the President has set forth 

a strong cornmitment to addressing GAO's concems regarding the current fragmentation 

in food safety oversight by establishing the Food Safety Working Group. If confirmed, I 

would support OMB's ongoing commitment to work collaboratively with Congress, 

GAO, and Federal agencies to review and troubleshoot items on the High Risk List. 

18. GAO publishes annually a report describing areas where it has found evidence of 

duplication, overlap, or fragmentation among government programs and describing 

opportunities to reduce the cost of government operations or to enhance revenue 

collection. In your view, how can agencies, OMB, and the Congress make the most 

effective and appropriate use of GAO's annual report on duplication, overlap, 

fragmentation, cost saving, and enhancement of revenue collection? 

I believe that GAO's annual report on duplication, overlap, and fragmentation is a 

valuable tool in helping to highlight particular areas where improvements could be made 

to make government more efficient and cost effective. In GAO's most recent report, they 

noted that the executive branch has made progress on over 75 percent of its 

recommendations from prior reports, including in important areas as diverse as food 

safety, veteran's homelessness, and financial literacy. 

Looking forward, it is important that agencies, OMB, and Congress continue to usc this 

report as a guide to identify further areas to reduce duplication or overlap. OMB has 

1 See, e.g., GAO's 2013 High Risk List, http://www.gao.gov/highrisk 

Senate Homeland Security and Governmental Affairs Committee 90f30 
62 

directed agencies to review the recommendations made by GAO, as well as other efforts, 

to identify arcas where government services could be provided more effectively or 

etIiciently through consolidated, streamlined, or better coordinated programs. 

19. Are you familiar with the specific recommendations the Government Accountability 

OtIices' annual report on duplication made for the Executive Branch to undertake in 

order to address duplication? Please list any speeific recommendations regarding OMB 

actions to alleviate duplication you plan to pursue jf confirmed as OMB Deputy Director. 

Though I am not familiar with each individual recornmendation made by GAO, I am 

familiar with their overall fmdings and the importance of the work itself. In particular, I 

was encouraged to see that GAO noted progress on over 75 percent of the 

recommendations made to the Executive Branch in prior reports. Moreover, when 

looking at the broad areas and categories of duplication identified, GAO found that, 

working together, the Administration and Congress have made progress on 104 out of the 

131 areas previously identified. 

Looking forward, I believe that it is imperative that OMB continues this progress in all 

areas of duplieation or overlap across the Federal government. For example, the 

President has put forward proposals to reduce duplication in critical areas identified by 

GAO, such as Federal initiatives to promote science, technology, engineering, and 

mathematic (STEM) education, modernizing and streamlining training and employment 

services, and working to consolidate the various economic development programs that 

help businesses grow and compete that are spread across various agencies. I see the 

opportunity for continued progress in these and other areas, and look forward to pursuing 

thern in partnership with Congress if confirmed. 

Financial Management 

20. Despite considerable effort to improve federal financial management and systems, 

significant deficiencies remain, including inadequacies that prevent the United States 

Government from receiving an opinion on its consolidated financial statements. While 

agencies have taken a number of steps over the years to modernize federal financial 

management systems, many of these modernizations efforts have been plagued by cost 

and schedule overruns and performance shortfalls. What additional steps do you think 

OMB and agencies should take to further improve federal financial management 

systems? What would you do, if confirmed, to foster improvement? 

Agencies need effective financial management systems in order to effectively implement 

programs, track spending, and provide meaningful reporting to ensure accountability for 

the use oftaxpaycr dollars. OMB is working together with Treasury to address 

Senate Homeland Security and Governmental Affairs Committee 100f30 
63 

challenges such as fragmented systems, and I understand that significant progress is 

underway. For example, OMB recently issued guidance calling for greater use of shared 

services in order to implement new and modern financial management systems and 

facilitate more seamless government-wide reporting. This guidance will help agencies 

leverage pre-existing government investments and expertise and utilize systems with 

proven track records. If confirmed, I would continue to support these efforts and the use 

of shared serviees as a more efficient path forward. 

Improper Payments 

21. Congress passed The Improper Payments Elimination and Recovery Improvement Act of 

2012 (p.L. 112-248) during the end oflast session. This new law follows passage of 

the Improper Payments Elimination and Recovery Act of2010 (p.L. 111-204). Both laws 

seek to identify, prevent, and recover the more than a hundred billion dollars in improper 

payments made by federal agencies each year. Since not all agencies have fulfilled the 

requirement of improper payments law, how do you believe OMB should work with 

agencies to more fully implement improper payments requirements? What role do you 

anticipate for OMB in continuing to press agencies to identifY, prevent and recover 

improper payments? 

The Administration is cornmitted to addressing improper payments. The Improper 

Payments Elimination and Recovery Act of 20 10 (IPERA) and the Improper Payments 

Elimination and Recovery Improvement Act of2012 (IPERlA) are important steps in 

furthering this commitment. In particular, these pieces of legislation arm agencies with 

new tools and authorities to share data, conduct audits, and measurc payment errors. The 

President's Budget includes a numbcr of program integrity proposals that aim to reduce 

improper payments and improve government efficiency. For example, there are key 

program integrity proposals aimed at Continuing Disability Reviews for Social Security 

recipients, closing a loophole in current law that allows people to collect full disability 

benefits and unemployment benefits that cover the same period of time, and requiring 

States to step up their efforts to prevent unemployment benefits from being paid to those 

who are not eligible. 

Over the last three years, through these and similar efforts, agencies made progress in 

reducing improper payments, reducing the rate from 5.42 percent in 2009 to 4.35 percent 

in 2012. The Administration also established the "Do Not Pay" initiative to help 

agencies share eligibility information prior to making payments. However, improper 

payment ratcs and amounts remain at unacceptable levels, and the Federal govermnent 

must continue to build on progress and address this important issue. If confirmed as 

Deputy Director, I would work to further build on congressional and Administration 

action to reduce improper payments. 

Senate Homeland Security and Governmental Affairs Committee 11000 
64 

22. In its FY20 14 budget proposal, the Administration has described many ref onus that could 

substantial reduce impropcr payments made by federal agencies, perhaps totaling in the 

billions of dollars in saving. Many solutions for reducing federal improper payments 

involve collaboration and coordination between federal agencies, inspectors general and 

state govermnents. Successful implementation of these initiatives will require leadership 

by OMB, as well as work with Congress to ensure proper statutory authority and 

adequate budgets. 

a. Which specific offices or offices do you believe should act as lead to ensure that the 

major, federal-wide program integrity proposals continue as a priority? 

The President's Budget includes a number of program integrity proposals that aim to 

reduce improper payments and improve govermnent efficiency. These are critical 

proposals that span a wide variety of programs, from Social Security to tax collection 

and fraud to Unemployment Insurance. Within OMB, I believe the Office of Federal 

Financial Management plays an important role in ensuring that these proposals 

continue to be a government-wide priority. In addition, the relevant OMB Resource 

Management Offices also playa key role, depending on the specific proposals and the 

impacted agencies. 

b. Do you believe that it is within the OMB Deputy Director's purview to reinforce 

agency data-sharing and collaboration in order to reduce waste and fraud? If so, what 

would you specifically plan to do in this area if confinned? 

Increasing data sharing amongst agencies is critically important to reducing waste and 

fraud. OMB plays a critical role in facilitating agency collaboration and in guiding 

agencies to implement data-sharing in ways that adequately safeguard privacy and 

comply with laws, regulations, and policies. OMB has been focusing on these types 

of issues for the last few years, as exemplified by the efforts to strengthen the "Do 

Not Pay" initiative. If confinued, I would work closely with the OMB Deputy 

Director for Management to ensure a continued coordinated approach to these issues 

withinOMB. 

c. The Department of Treasury Office of the Inspector General recently identified over 

$11 billion in improper payments under the Eamed Income Tax Credit (EITC)? How 

will you and OMB work with Treasury to remedy this problem? 

2 Treasury Inspector General for Tax Administration, The Internal Revenue Service was not in complianee with all 

requirements of the Improper Payments Elimination and Recovery Act for FY2012, 2013-40-024 (February 25, 

2013), hltp:/Jwww.!reasUTY.goy/tigl!!lauditreportsl2013repo!.!l!l201340024fr.pdf. 

Senate Homeland Security and Governmental Affairs Committee 120no 
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My understanding is that the Administration has already made significant strides in 

addressing improper payments across Federal programs, including in the EITC 

program. In FY 2009, the government-wide improper payment rate was at an alltime-high level of 5.42 percent. As a result of several actions taken by the 

Administration, the government-wide improper payment rate has steadily declined to 

4.35 percent in FY 2012. Moreover, the crror rate in EITC declined in FY 2012. 

That said, there is certalnly more that the Federal government can and should do to 

address improper payments, and address instances of fraud, abuse, or error in any 

program, including the EITC and the rest of the tax system. To that end, the 

President's 2014 Budget includes an initiative to prevent identity related refund fraud, 

protect taxpayers' identities, assist victims of identity theft, and enhance IRS's 

existing revenue protection strategy. Further, the Budget includes an initiative to 

build out the IRS's tax return preparer compliance activities. These efforts, as well as 

the President's proposal to provide additional funding for IRS program integrity 

efforts, are critical to improving tax compliance and preventing fraud. If confirmed, I 

look forward to working with Congress on these and other efforts to improve the 

integrity of all Federal programs. 

Real Property Management 

23. The federal government is the largest owner of real property in the United States, and 

weaknesses in the government's management of real property have been a challenge for 

many years. What do you believe are the principal obstacles that the federal government 

faces in the management of and, where appropriate, disposition of federal real propcrty? 

I agree that the management of the government's real property is a significant issue. The 

Administration has made notable progress in addressing these issues and reforming 

Federal real propcrty asset management, leading to $8.5 billion in savings to date. 

Notably, OMB recently directed agencies implement a new government-wide policy to 

restrict real estate growth and institute a long-term planning process. This policy, known 

as "Freeze the Footprint," is one that could have significant benefits in terms of 

constraining the size of our real estate footprint, and is an initiative I look forward to 

working on if confirmed. My undcrstanding is that there are several obstacles including 

legal requirements that serve as a barrier to effective disposition strategies, and the lack 

of an overarching framework to resolve diverse stakeholder interests with respect to 

specific propertics. If confirmed, I would work with the Committee to explore potential 

legislative solutions that can help overcome additional existing challenges in disposing of 

excess, underutilized, or vacant properties. 

Senate Homeland Security and Governmental Affairs Committee 13 of30 
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24. To help in the consolidation or sale ofunderperfonning properties, the FY 2014 Budget 

includes a proposal, using an approach from the Defense Department's Base Realignment 

and Closure (BRAC) program, for the creation of an independent Civilian Property 

Realignment Board that would forward to the Congress bundled recommendation of 

properties or actions to better align the government's property inventory with its needs. 

a. What do you understand to be the reasons in support of this civilian BRAC proposal, 

and what do you believe would be some of the challenges in making it work as 

intended? 

As I understand it, by recommending actions on bundlcs of multiple properties, a Civilian 

Property Realignment Board would help overcome the usual obstacles that delay 

transactions for one asset at a time. The Board's recommendations would become 

effective unless Congress disapproved of them as a package. I understand that to address 

the common challenge of covering upfront costs, the Board would utilize a revolving 

fund to assist agencies in implementing Board recommendations. This is an approach 

that has proven successful under the BRAC process, and one that I believe is translatable 

to our civilian real estate footprint. 

b. How do you believe economic impacts should be addressed by such a Board as it 

assesses possible candidate recommendations? What role do you believe state and 

local governments should have in a civilian BRAC process? 

While the objective is to achieve significant cost savings for the Federal government, the 

Board, as I understand it, would be responsible for assessing local economic and 

community impact and incorporating such considerations into its 

recommendations. Under the proposal, the Board is required to convene hearings and 

take testimony to ensure they have close engagement with the community and direct 

properties to their highest and best use. 

25. In recent years, agencies have been looking at innovative approaches, such as enhanced 

use leasing, to get value from underutilized federal real property. What such othcr 

approaches would you suggest be examined to address the federal government's 

inventory of underutilized properties? 

The Administration is working hard to consolidate and dispose of underutilized 

properties. In fact, the Administration already implemented several initiatives to 

encourage the disposal and consolidation of underutilizcd real property, including the 

implementation of a government-wide policy to restrict real estate growth and institute a 

long-tenn planning process that, if confinned, I would support. 

Senate Homeland Security and Governmental Affairs Committee 14000 
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A potential tool to help manage underutilized Federal real property is GSA's statutory 

exchange authority. With this authority, GSA could potentially exchange Federal 

buildings in its portfolio for other assets. One recent example is in GSA's cxploration of 

such an option with the FBI Headquarters. As I understand it, such an exchange could 

help to improve operational efficiency and reduce costs. 

Procurement Policy 

26. For each of the last five fiscal years, total spending on federal contacts has exceeded half 

a trillion dollars. In March 2009, President Obama issued a memorandum to federal 

agencies stating that it is the policy of thc federal govcrument that agencies shall not 

engage in noncompetitive contracts except where their use is fully justified and that there 

shall be a preference for fixed-price contracts. Moreover, the President directed agencies 

to ensure that taxpayer dollars are not spent on contracts that are wasteful, inefficient, 

sufficient to misuse, or otherwise mot designed to meet the needs of the 

government. The President also stated that agencies must have the capacity to manage 

and oversee the contracting process and ensure that functions that are inherently 

govermnental are performed by executive agencies and are not outsourced. The President 

directed the Director of OMB to issue governmcut wide gnidance related to these 

goals. What are your plans for measuring how well agencies are meeting the goals 

established by the President in his March 2009 memorandum, and in complying with the 

series of guidance issued by OMB pursuant to that memorandum? 

I understand that over the last four years, this Administration has made progress in 

reducing contract spending and making federal contracting more competitive. Last year, 

the Federal government recorded a $20 billion decrease in contract spending last year -

the largest such decrease on record - and met the President's goals of reducing the use of 

management support service contracts. Additionally, the Federal government 

experienced a historic increase in the contract dollars that were put out for competitive 

bid the average level of competitive contracting in the last four years is 64 percent 

compared to an average level of 57 percent during the previous Administration. While 

these are important steps in the right direction, if confirmed, I would work with the 

Administrator for Federal Procurement Policy to make sure our government-wide rules 

for using high-risk contracts are clear, that agencies have effective acquisition 

management practices, and that the acquisition workforce has the tools necessary to 

award and manage contracts that deliver the best results. 

Senate Homeland Security and Governmental Affoirs Committee 150f30 
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27. What new initiatives or policies would you suggest to improve the efficiency and 

effectiveness of federal procurement? 

The Administration is improving the efficiency and effectiveness of our contracting 

practices by implementing initiatives that help agencies buy smarter, develop better 

supplier relationships, and strengthen the acquisition workforce. These efforts are 

resulting in reduced contract spending, more competition, more dollars going to small 

businesses, and other key outcomes. If confirmed, I look forward to working with the 

Office of Federal Procurement Policy and Congress to ensure agencies have all of the 

necessary tools to further develop these core initiatives into cornmon contracting 

practices government-wide. 

28. Holding contractors responsible for past performance is an important tool for making sure 

the federal government receives good value from its contracts. However, OFPP has 

found in the past that contracting officers fill out past performance assessments for only a 

small percentage of awards, especially in civilian agencies, and the reports that were 

completed generally lacked sufficient information to be useful to other contracting 

officers. What steps will you take to help ensure that agencies complcte quality past 

performance evaluations for their contractors? 

The Federal government must hold contractors accountable for their performance in order 

to ensure proper stewardship of taxpayer dollars. As the world's largest buyer, the 

Federal government should only do business with those contractors that will act as 

responsible stewards of taxpayer dollars and provide the best value for the government. I 

understand that the Office of Federal Procurement Policy recently directed agencies to set 

aggressive targets for improving reporting compliance, and, if! am confirmed, I would 

work with the Administrator for Federal Procurement Policy to be sure that agencies are 

making significant progress toward their goals. 

29. What steps do you plan to take to strengthen the administration's efforts on strategic 

sourcing? 

Leveraging the significant buying power of the Federal government can save money and 

reduce administrative costs. I understand that OMB recently established the Strategic 

Sourcing Leadership Council, made up of the largest buying agencies and the Small 

Business Administration, to accelerate the identification of strategic sourcing solutions 

for commonly purchased goods and services. I think this is a positive development that 

should be strengthened and expanded. If confirmed, I look forward to working with 

Federel agencies to ensure the Federal government is taking maximum practicable 

advantage of this important management initiative. 

Senate Homeland Security and Governmental Affairs Committee 160f30 
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30. Through its responsibility for developing certification requirements for the civilian 

acquisition workforce, and through its leadership over the Federal Acquisition Service, 

OFPP has a key role in the training of the acquisition workforce. Approximately 83,000 

personnel across the government are responsible for buying the goods and services 

agencies need at a reasonable cost, and for ensuring that contractors deliver what they 

promise. Recently, GAO issues a report showing that agencies lack data on the costs and 

effectiveness of their acquisition training programs. GAO recommended that OMS issue 

guidance on the types of costs that agencies should include in the Human Capital Plans to 

help determine their total training investment. Also, GAO recommended that OMB 

require agencies to collect and analYLe participant evaluations of acquisition workforce 

training. What steps will you take to ensure that OMB follows up on these 

recommendations? 

I recoguize the importance of having a competent and capable acquisition workforce to 

ensure that agencies get the best solutions for taxpayer dollars. I understand that there are 

certification requirements for the acquisition workforce and that training is a large 

component of this certification. Ensuring that the Federal govemment makes smart 

investments in this training and evaluate its effectiveness is especially important in this 

budget-constrained environment. If confirmed, I would work with the Administrator for 

Federal Procurement Policy to ensure that appropriate guidance is issued so that agencies 

can make more informed decisions regarding this training. 

31. In 2012, GAO fonnd that the federal agencies who account for the largest amount of 

contract spending were only managing about five percent of total spending through 

strategic sourcing efforts, leaving billions of dollars in potential savings on the table. 

GAO also reported OMB had not established clear guidelines for agencies to follow to 

ensure savings from strategic sourcing efforts are measured consistently, and has not 

taken steps to focus strategic sourcing efforts on the categories of goods and services 

federal agencies spend the most.3 What specific steps do you think OMB needs to take to 

improve existing strategic sourcing efforts? How do you think OMS can better target the 

categories of goods and services federal agencies spend the most money on every year? 

I believe that strategic sourcing presents an important opportunity to deliver increascd 

value to agencies and taxpayers by leveraging the government's buying power to lower 

contracting costs. I was encouraged by OMB's December 2012 memo on this topic and 

the creation of the Strategic Sourcing Leadership Council (SSLC). My understanding is 

that this body, chaired by the Administrator for Federal Procurement Policy and 

consisting of representatives from the 7 largest contracting agencies along with the Small 

3 "Strategic Sourcing: Improved and Expanded Use Could Save Billions in Annual Procurement Costs" GAO-12-

919 (September 20, 2012), htin:llwww.gao.gov/products/GAO-12-919. 

Senate Homeland Security and Governmental Affairs Committee 17 of 30 
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Business Administration, is in the process of identifying additional areas for which new 

government-wide acquisition vehicles or management approaches should be developed 

and implemented. The SSLC is also developing the appropriate methodologies to 

analyze the potential savings and track progress in each category. 

If confirmed, I would look forward to working with the SSLC and Federal agencies to 

build upon their current efforts to buy smarter, and continue to identitY categories of 

goods and services where the government can save money through strategic sourcing 

efforts. 

u.s. Postal Service 

32. The Administration's FY2014 Budget states that the Administration recognizes the 

enormous value of the Postal Serviee and the urgent need forreform, and offers that the 

Administration will work with the Congress and stakeholders to gain the nccessary 

reforms. (FY 2014 Budget of the U.S Government, Analytical Perspectives page 1302 

and Appendix page 1302.) Which office or offices and, in particular, which official or 

officials within the Administration do you beHeve should take the lead in working with 

Congress and stakeholders to secure the necessary reforms to ensure the future viability 

of the Postal Service. If confirmed, what role would you expect to take in this effort? 

Although the Postal Service is an independent establishment of the Federal government, 

the Administration, partkularly thmugh OMB, OPM, and Treasury, coordinates, 

develops, and analyzes legislative recornmendations to assist and improve the USPS's 

financial condition. The President's 2014 Budget proposes a balanced set of reforms that 

provide temporary cash relief and structural flexibilities that together would allow USPS 

to reduce its costs, increase its revenues, and realign its business strategy to regain 

solvency and better compete in the changing marketplace. 

If confirmed, I expect OMB's role in forecasting impacts on the Postal Service budget 

and working with the Congress and other USPS stakeholders in securing meaningful 

Postal reform to continue. 

33. The Budget includes a proposal that the surplus amounts that Postal Service has paid into 

its OPM account for its share of Federal Employee Retirement System costs should be 

returned to the Postal Service, and that OPM should calculate these costs using factors 

specific to the demographics of the Postal Service workforce. Do you agree with this 

proposal? If so, could you explain why you believe it is appropriate that these funds, now 

in an OPM account, should be made available to the Postal Service? How would you 

propose to address problems that arise from annual swings in estimates of such 

surpluses? Do you believe that the deficit of the Civil Service Retirement System 

Senate Homeland Security and Governmental Affairs Committee 18 of 30 
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(CSRS) should be taken into account before any Federal Employment Retirement System 

(FERS) surpluses could be transferred to the USPS? 

I believe returning to the Postal Service the surplus contributions it paid into the Federal 

Employee Retirement System is a reasonable means of helping alleviate the near-term 

USPS cash erunch as part of an overall, balanced reform to mitigate USPS's estimated 

$20 billion financial gap over the next few years without off-loading this burden onto 

American taxpayers. If confirmed, I look forward to working with Congress on a 

responsible reform of the Postal Service. 

34. The Budget also proposes that postal reform legislation should be scored in terms of the 

unified budget to better reflect the impact of the lehrislation on overall deficits and 

debt. Do you agree with this proposal, and, if so, would you explain why you believe 

such a change in scoring rules would better reflect the impact on dcficits and debt? 

The unified budget perspective that includes aU Federal transactions, including those in 

off-budget Postal Service and Social Security accounts, provides a comprehensive picture 

of Federal operations and their full fiscal impact. The Budget proposes to amend 

PA YGO rules to include the effects of currently "off-budget" Postal transactions when 

scoring Postal reform because current P A YGO rules would only capture one side of the 

proposed effects of its provisions. For example, the proposed refund of surplus USPS 

FERS contributions from OPM to Postal would only reflect the outlays from OPM under 

current FA YGO rules, and would fail to capture that the payment is received by USPS. 

To better inform the debate over Postal reform and reflect the reform's effect on the 

government as a whole, a unified deficit scoring seems more sensible in this instance. 

E-Government and Information Technology 

35. Since the start ofthis Administration, OMB's Federal Chief Information Officer has 

launched several significant information technology (IT) initiatives, including the 25 

Point IT Reform Plan, PortfolioS tats, and the Data Center Consolidation Initiative. These 

initiatives have the potential to save billions of dollars and improve the performance of 

federal agencies. While agencies and OMB have made progress in improving the 

management of IT projects, it is unclear whether the full potential savings and 

efficiencies from these reforms would be realized. What do you see as the major 

challenges in information policy and technology management facing the federal 

government? How can OMB best help the government meet those challenges? 

If confirmed, I plan to help continue the strategic agenda for Federal IT. My 

understanding is that the TechStat, Federal Data Center, and PortfolioStat initiatives 

established over the past four years have all been delivering promising results. For 

Senate Homeland Security and Governmental Affairs Committee 19 of 30 
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example, OMB identified nearly $300 million in savings from the PortfolioStat initiative 

in a single quarter. I am committed to furthering this type of progress. If confirmed as 

Deputy Director, I would work with the Director and the Deputy Director for 

Management to implement these initiatives to ensure the Federal government meets 

targets and accounts for progress. 

36. How do you plan to further OMB's Federal Data Center Consolidation Initiative? How 

specifically do you plan to work with individual agencies, if at all, to consistently define 

what constitutes a data center, how to efficiently consolidate unnecessary centers, how to 

consistently and repeatedly estimate savings resulting from such consolidations, and to 

ensure that agencies are executing what is expectcd of them? 

The Administration closed hundreds of data centers and identified hundreds more for 

closure this year. Furthermore, the Administration integrated its data center 

consolidation initiativc into the broader PortfolioS tat effort, which is focused on cutting 

low-value technology investments and reinvesting savings in technologies with a higher 

return on investment. In addition to these important steps, I believe that Federal 

government can make further progress in areas like data storage and visualization. If 

confirmed, I would help drive efforts to achieve savings by identifying the most pivotal 

and effective data centers and closing those which are duplicative and inefficient. 

Cybersecurity 

37. One of OMB' s responsibilities in the area of cybsersecurity is working with the 

Department of Homeland Security (DHS) under the Federal Information Security 

Management Act (FISMA) to oversee Fcderal civilian agencies' cybersecurity programs. 

The President's Budget for FY2014 increased funding for DHS to support the security of 

other agencies. In your view, what is OMB's role in this effort? If confirmed as Deputy 

Director, how do you plan to work with DHS and the other federal agencies to ensure that 

our networks are secure and our cyber efforts are coordinated? 

The President is clear that the eybersecurity is one of the Nation's most serious economic 

and national security challenges. Cybersecurity remains a critical priority for the 

Administration. If confirmed, I would make cybersecurity and the protection of our 

information assets a priority_ The FY 2014 President's Budget devotes over $13 billion 

to programs and activities related to cybersecurity - including programs to secure federal 

networks, protect critical infrastructure, improve incident response, and shape the future 

cyber environment. Because of the diverse nature of authorities and responsibilities, 

cybersecurity truly requires a whole of government approach. Agencies across 

government play important roles in promoting cybersecurity. Ongoing congressional 

involvement will continue to be key to any cybersecurity solutions. If confirmed, I would 

Senate Homeland Security and Governmental Affairs Committee 20 of 30 
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look forward to working closely with other agencies and Congress to. advance that 

holistic approach. 

38. On July 16, 2010, the Director ofOMB and the President's Cybersecurity Coordinator 

issued a memorandum outlining and clarifying the respective responsibilities and 

activities of OMB, the Cybersecurity Coordinator, and the Department of Homeland 

Security (DHS) with respect to FISMA implementation. If confirmed, how would you 

view your responsibilities under this memorandum? What your thoughts on what needs 

to be done to improve the security of federal computers and nctworks? 

From what I understand, the Administration is making great strides to improve the 

integrity and security of the govermnent's information. A central component of this work 

has been to change how the govermnent thinks about cybersecurity - by shifting from a 

focus on compliance to one which focuses on execution and tracks key performance 

metrics to ensure agencies are given the tools to protect thcir systems from threats as they 

arise. This approach, known as continuous monitoring, allows a shift across the 

government to use information security as an enabler, instead of a limiting factor, in 

hamessing technological innovation. 

A key element in managing an information security program is having accurate 

information about sccurity posturcs, activities, and threats. If confirmed, 1 would work 

with DHS and OMB's Deputy Director for Management to ensure a well-designed and 

well-managed information security continuons monitoring programs to effectively 

transform an otherwise static security control assessment and risk determination process 

into a dynamic process that provides essential, near real-time security status. Because the 

threat environment is particularly dynamic, I would also work closely with the National 

Security Staff and Cybersecurity Coordinator to ensure that our programs reflect and 

adapt to the threats we face from domestic and foreign threats to our government 

networks. 

39. Under the 2010 memorandnm, what is your understanding ofDHS 's responsibilities for 

implementing FISMA and ofOMB's role in coordinating with and overseeing DHS's 

functions? 

a. Is there a role for OMB in ensuring DHS carries out their responsibilities under 

FISMA? If so, what is that role? 

b. If concerns about DHS' s work in fulfilling its FISMA come to your attention, will 

you bring them to the Committee in a timely manner? 

From what I understand of the changes instituted in 20 I 0, the relationship between OMB 

and DHS continues to evolve and improve over time. DHS has an integral role in driving 

Senate Homeland Security and Governmental Affairs Committee 210f30 
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our cybersecurity efforts at the operational and technical levels. OMB takes part in 

developing cybersecurity policies and guidance from a management standpoint, as well 

as overseeing the work that DHS is doing from a budgetary standpoint. If confirmed, I 

would work to ensure that senior leadership at OMB and DHS continue to work together 

on these cybersecurity efforts and making sure they are focused, organized, and cost 

effective. 

Moreover, I believe that every agency in the U.S. government has a role to play in 

cybersecurity whether in simply securing its own network or more wide ranging 

responsibilities. Because of the diverse nature of authorities and responsibilities, 

cybersecurity truly requires a whole of government approach. Ongoing Congressional 

involvement will continue to be key to any cybersecurity solutions. If confirmed, I would 

look forward to engaging with Congress on any matters in this area that may require 

attention. 

40. To what extent do you believe DHS's FISMA activities are well-managed, suitably 

designed, and being implemented on time and on budget? Please explain. 

In my time as a counselor at OMB, I have not yet had the chance to become familiar with 

how well DRS is implementing its FISMA responsibilities. If confirmed, I intend to 

review DHS' actions in this area to ensure they are effective, well-managcd, and 

implemented appropriately. 

41. Do you have any concerns about DHS's work in fulfilling its responsibilities under 

FISMA to secure federal technology? 

As the President has said, the cyber threat is one of the Nation's most serious economic 

and national security challcngcs. I believe this is an area that has received and will 

continue to require high level attention from government leaders. If confirmed, I would 

ensure OMB continues to work closely with DHS to implement cybersecurity programs 

that are both effective and efficient. 

Government Transparency 

42. Since the passage of the Federal Funding Accountability and Transparency Act of2006 

(P.L. 109-282) ("Transparency Act"), the OMB has played an integral role in creating 

and implementing the USASpending.gov website. Despite OMB's involvement in 

issuing policies and guidance for agencies to follow in their data submissions, the 

information on USASpending.gov has been found to be inaccurate and incomplete. The 

President's FY2014 budget seeks to transfer responsibility of USA Spending. go v to the 

Senate Homeland Security and Governmental Affairs Committee 22 of 30 
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Department of Treasury. If this transfer occurs, what role, if any, do you anticipate you 

as Deputy Director of OMB would have in overseeing this transfer of responsibility from 

OMB to the Department ofTrcasury? What role, if any, should OMB have after this 

transfer to ensure that agencies are complying with any future guidance the Department 

of Treasury may issue to implement the Transparency Act? 

The President's Budget capitalizes on the Treasury Department's extensive financial 

expertise and role as the source of government-wide financial data by having the 

Dcpartment assume responsibility for operating and expanding USAspending.gov. I 

understand that this effort to improve the quality of financial data provided to the public 

through USASpending.gov is consistent with the recommendations from the Government 

Accountability and Transparency Board (GA TB), which the President created to provide 

strategic direction of Federal spending transparency. As with all government-wide 

management initiatives, OMB plays an important role in providing guidance and 

leadership on the President's overall agenda to provide an open and transparent 

government. If confinued, I would continue to support these efforts. 

Regulatory Affairs 

43. In what respects do you believe the current process for proposing, adopting, and 

reviewing federal regulations should be improved, and what steps do you believe OMB 

or others in the government should take to make those improvements? 

The current process, including interagency review of draft regulations and carcful 

attcntion to costs and benefits, began with the Reagan Administration and has now been 

in place for over three decades. Over that time the process evolved and improved in 

several key respects. Most recently, President Obama's Executive Order 13563, 

Improving Reguiation and Regulatory Review, required agencies to initiate retrospective 

reviews of key regulations to streamline, modify, or repeal regulations and reduce 

unnecessary burdens and costs. 

The regulatory process has also become more transparent and accessible to the public. 

For example, Regulations.gov allows the public to find regulations on a particular subject 

and file comments electronically on proposed rules open for comment. This improved 

access allows for greater public participation and provides the public with more complete 

infonuation about the rulemaking. 

If confinued, I would strive to ensure that the regulatory process continues to maintain a 

balance between our obligation to protect the health, welfare, and safety of Americans 

and our commitment to promoting economic growth and job creation. 

Senate Homeland Security and Governmental Affairs Committee 230f30 
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44. Review and revision of existing regulations can impose substantial demands on agency 

resources and can take substantial time to complete. How do you believe agency efforts 

should be targeted so that the review of existing rules can achieve the greatest benefit for 

achieving our goals of protecting health, safety, the environment, and consumers while 

also promoting economic growth and job creation? 

Executive Orders 13563 and 13610 stress the importance ofretrospcctive review of 

existing significant regulations and impose a series of requirements designed to promote 

public participation, priority-setting, and accountability. In particular, Executive Order 

13610 emphasizes that agencies should prioritize "initiatives that will produce significant 

quantifiable monetary savings or significant quantifiable reductions in paperwork 

burdens" and "shall give priority to reforms that would make significant progress in 

reducing those burdens while protecting public health, welfare, safety, and our 

environment." Executive Order 13610 also requires agencies to "give special 

consideration to initiatives that would reduce unjustified regulatory burdens or simplify 

or hannonize regulatory requirements imposed on small businesses." 

Robust public input is one way to help ensure that agency review efforts are well 

targeted. In developing retrospective review plans pursuant to Executive Order 13563, 

agencies solicited public cornment on draft versions of their plans, which helped the 

agencies improve their plans and identify additional possible rules for retrospective 

review. As with all rulemaking generally, existing regulations should only be revised if 

the benefits of doing so justify the costs. 

Personnel Management 

45. Since 2001, GAO has identified strategic human capital management as a governmentwide high-risk area, explaining that agencies must do a better job of addressing missioncritical skill gaps that threaten the government's ability to effectively handle significant 

national issues. What role should OMB play in efforts to improve human capital 

management across government? 

The issue of improving human capital management across government, including 

reducing critical skills gaps, is extremely important. OMB is working closely with OPM, 

the Chief Human Capital Officer Council, and agencies to identify areas with significant 

government-wide skills gaps. Identified government-wide skills gaps include 

economists, grants management, procurement, human resources, cybersecurity and 

STEM, in addition to agency-specific priority skills gap areas. If confirmed, I would 

work to ensure that OMB and OPM continue to make progress in this area. 

Senate Homeland Security and Governmental Affairs Committee 240f30 
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46. The Administration's FY20 14 Budget describes the substantial decline in the size of the 

federal workforce, relative to the private sector and the overall U.S. population, over the 

past 50-60 years. (FY 2014 Budget of the U.S Government, Analytical Perspectives, 

pages 103-104.) Some have suggested that the total workforce of the federal government 

should be considered to include not only government employees, but also the contractor 

workforce that provides services to the federal government, and the workforce of 

grantees that receive federal funding. For what, if any, purposes do you believe it would 

be useful and appropriate to consider the government workforce in this broader sense? 

Federal agencies rely on both their own employees and private sector contractors to 

deliver important services to the taxpayer. An agency has to ensure that it has the right 

mix of federal employees and contractors in mceting its mission. This approach to the 

multi-sector workforce is one that the Administration has placed significant emphasis on, 

taking a holistic view to ensure that contracting opportunities provide the best value for 

the government and that inherently governmental work is performed by the Federal 

government. 

47. The Budget lays out a number of significant challenges for the government in improving 

the federal workforce. For example, the rising number offederal retirements will require 

preparations to enable transfer of knowledge, succession planning, and training of new 

hires. Also, as GAO has pointed out on its high risk list, there are significant gaps in the 

workforce for certain skills and occupations that agencies need to meet their 

missions.4 (Examples include IT -cybersecurity specialists, acquisition specialists, 

economists, human resources specialists, auditors, and various occupations in areas of 

science, technology, engineering, and mathematics.) Meeting these and other challenges 

for the federal workforce will require a strategic approach to hiring and training; yet 

budget constraints, and sometimes statutory limits, make it hard to hire and train 

strategically. What do you believe the administration can do, and what do you believe 

Congress should do, to improve the federal workforce while also controlling the federal 

budget? 

The current work that OMB and OPM are doing with agencies to identify critical skills 

gaps is an example of where OMB and OPM can be useful in identifying common 

weaknesses across agencies and helping to formulate cornmon solutions. Agencies 

already identified five critical occupations with skills gaps and have put together teams of 

people from different agencies to develop action plans for closing gaps across agencies. 

The Administration updates progress on these efforts each quarter on performance.gov as 

part of its Cross Agency Priority Goal effort. The Administration is also working to 

implement new phased-retirement legislative authority that will allow for a more cost-

, "High-Risk Series An Update" GAO-13-283 (February 13, 2013), http://www.gao.gov/productsfGAO-13-283. 

Senate Homeland Security and Governmental Affairs Committee 250f30 
78 

effective way to retain critical knowledge within government. In addition, the 

Administration previously proposed to Congress legislation that would allow crossagency hiring for the same occupation, a proposal that would allow more strategic, lowercost hiring. 

Budget and Economic Policy 

48. In your view, what actions should Congress and the Administration take to address our 

long-term structural budgetary imbalances? By what amount do you believe our deficit 

should be reduced in order to stabilize our finanees, and by how much in the short term 

and by how much in the long term? What level of publicly held debt as a percentage of 

GDP do you believe would be appropriate to achieve by the end of2023? 

I believe that fiscal discipline is an important component of a sound, pro-growth 

economic strategy. In the current environment, this means aiming to enact a 

comprehensive deficit reduction package that reduces deficits and puts debt on a 

declining path as a share of the economy, while supporting our economic recovery and 

improving our long-term competitiveness. The President's FY2014 Budget that lays out 

this type of approach. If enacted, it would bring deficits below 3 percent ofGDP by 2016 

and'below 2 percent by 2023. Publicly held debt as a percentage ofGDP would be put 

on a downward path, reaching 73 percent in 2023. If confirmed, I look forward to 

working with Congress on a comprehensive deficit reduction package along these lines. 

49. Do you believe that revenues need to be increased in addition to spending being reduced 

(each as a percentage ofGDP), to restore balance to our nation's finances? Ifso, what do 

you believe should be the relative amounts of spending cuts and revenue increases? 

Yes, I believe that increased revenues are a necessary component of any substantial 

deficit reduction package. I believe that the right approach to a comprehensive deficit 

reduction package is to combine additional revenues from tax reform with additional 

spending reductions from entitlement reform. The President's Budget takes this approach, 

building on the more than $2.5 trillion in already enacted deficit reduction with an 

additional $1.8 trillion in deficit reduction from tax reform, entitlement reform, and 

additional spending cuts. In total, this approach would include more than $2 in spending 

cuts for every $1 in rcvcnue. 

SO. Do you have rccommcndations on how the policy-making process should be reformed to 

more effectively address our long-term fiscal challenges? For example, do you believe 

that budget reforms, such as enactment of enhanced rescission authority for the President 

or biennial budgeting, should be considered in order to provide an important tool for the 

Senate Homeland Security and Governmental Affairs Committee 26 of 30 
79 

President to cut wasteful spending and ensure that tax-payer dollars are being spent 

wisely and effectively? 

I believe that it is possible for us to address our long-tenn fiscal challenges with our 

existing procedures ifboth sides are willing to compromise and work together to meet 

those challenges. That being said, I would bc happy to discuss potential refonns with 

Congress should I be confinned. 

51. In several public statements, you expressed your support for what the Administration has 

tenned "The Buffet Rule.,,5 In other instances, you advocated tax code reforms that 

included the elimination of certain corporate loot-holes and the extension of tax credits 

for energy efficient cars, house, and appliances. If confinned, what specific tax refonns 

would you consider a priority? 

I believe that we have a substantial opportunity to reform our tax system in a way that 

reduces complexity and reduces the deficit while increasing economic efficiency and 

growth. While there are some tax incentives that serve important purposes, our tax code 

has been complicated by too many special provisions and carve-outs that need to be 

refonned or eliminated as part of comprehensive rcfonn. 

Although the Administration has identified numerous inefficient tax loopholes and 

proposals to broaden the tax base, this is an area where close cooperation with Congress 

is essential and if confinned I look forward to hearing your ideas for improving the 

system and working with Congress on this important issue. 

52. Do you support the recommendations of the President's National Commission on Fiscal 

Responsibility and Refonn, as part of the solution for our nation's current fiscal 

challenges? If so, please describe which policies from this proposal should be considered 

by Congress and the Administration, and whether and how you would plan to advocate 

these refonns during any upcoming budget negotiations. 

I believe the Commission's framework is the right overall approach - one that couples 

additional spending cuts and entitlement refonns with increased revenues through tax 

S White House White Board: The Buffet Rule, http://www.youtube.com/watch?v=PLl70fOcwnY. 

6 Open for Questions: America's Fiscal Future, Speech on Fiscal Policy with Brian Deese, National Economic 

Council, April 13, 2011, htto:llwww.youtube.com/watch?v=aYunhBczoXE; Center for American Progress 

(Contributors Brian Deese and John Lyman), Offshoring and the American Economy: A Progressive Agenda 

(October 2004). 

Senate Homeland Security and Governmental Affairs Committee 27000 
80 

refonn. Since the Commission's chainnen released their original recommendations, the 

President and Congress, working together, have enacted more than $2.5 trillion in deficit 

reduction including larger cuts to domestic discretionary spending than the Commission 

originally recommended. Building on that progress, the President's FY2014 Budget 

includes a compromise deficit reduetion package that incorporates a number of the 

Commission's proposals, including refonns to Medicare that reduce costs while 

preserving its basic guarantee and several proposals to reduce other mandatory spending, 

such as agriculture subsidies, subsidies while also raising revenues through tax refonn. 

53. Every year the President's budget submission to Congress includes an extensive list of 

govemment programs proposed to be tenninated, consolidated, or refonned, in order to 

achieve signifieant budgetary savings. Yet, Congress continues to fund nearly all of these 

same programs. What steps will you take to work with Congress to eliminate or refonn 

unneeded or underperfonning programs and to achieve the President's recommendations 

for budgetary savings? 

It is critically important that Congress and the Administration work together to ensure 

that we are taking action on any and all opportunities to cut unnecessary programs, 

consolidate those that are overlapping or fragmented, and save money wherever possible 

through increased efficiencies. As noted, the Administration each year puts forward a 

series of proposals to do just that. For example, the 2014 budget specifically proposed 

215 cuts, consolidations, and savings proposals, which are projected to save more than 

$25 billion in 2014. 

The Administration and Congress have already done important work to get some of the 

prior proposals enacted. I believe that there is more that can be done to continue this 

progress and, if confinned, I look forward to working with Congress to explore broad 

strategies that can realign Federal programs and consolidate them as necessary to make 

govemment more efficient. 

54.0MB recently asked federal agencies to achieve savings through a number of refonns, 

including reduced spending on travel, conference attendance, purchase of promotional 

items, among other policy changes. Do you plan to continue to expand on this effort to 

make govemment operations more efficient and reduce guvemment waste? If so, please 

describe some of the specific additional refonns you believe agencies could undertake to 

achieve additional savings. 

As you note, the Administration has taken significant steps as part of the President's 

Campaign to Cut Waste to achieve savings through reduced administrative spending, 

including in areas such as travel, conferences, fleet, printing, IT devices, and elsewhere. 

My understanding is that this cffort is already proving successful, with agencies 

Senate Homeland Security and Governmental Affairs Committee 28000 
81 

identifying $11 billion in targeted reduced costs in these and other areas compared to 

what was spent in FY 2010. 

If confirmed, I look forward to continuing this effort and expanding on it. In particular, I 

believe there are significant opportunities to reduce costs in areas such as advisory 

service contracts, real estate, and other administrative expenses. By leveraging strategic 

sourcing and other shared servicc efforts, as well as continuing to use technology to 

eliminate overhead expenses, I believe there are significant opportunities to further 

reduce administrative costs and re-direct funds to agencies' core missions. 

55. Do you support ending sequestration? If so, then what specific deficit-reduction or other 

policies, if any, would you support putting in its place? 

Yes, I believe that sequestration's deep indiscriminate cuts are harming our economy in 

the short term while failing to lock in the kind oflong term deficit reduction our country 

needs. These cuts were never meant to take effect and they should be replaced with a 

comprehensive deficit reduction package that achieves the goal of putting our public debt 

as a share of the economy on a declining path. The compromise deficit reduction plan 

included in the President's FY2014 Budget, which includes mandatory and discretionary 

spending cuts, as well as increased revenues through tax reform, would turn off 

sequestration while achieving the long-term deficit reduction we need. At the same time, 

the President's budget replaces the poorly targeted cuts of sequestration with entitlement 

reforms that reduce the deficit while preserving Medicare over the long run, and 

investments that will strengthen our recovery in the short run. 

56. Please describe your role in the Presidential Task Force on the Auto Industry, including 

but not limited to your role in the Administration's actions taken with regard to General 

Motors ("GM"). 

I was a member of the Administration team that reported to the National Economic 

Council Director and Treasury Secretary and provided the President with input on 

managing the crisis facing the American auto industry. At the end of 2008, amid the 

worst financial crisis since the Great Depression, credit markets were frozen and both 

GM and Chrysler faced the choice of seeking government support or being liquidated. 

The Administration at the time projected that such liquidations could result in the loss of 

more than one million American jobs. In this context, the prior Administration extended 

short-term bridge loans to GM and Chrysler. When President Obama took office he faced 

the choice of how to ultimately resolve the crisis. 

After considering options, the President decided to provide additional financial assistance 

to GM and Chrysler on the condition that both companies develop restructuring plans that 

Senate Homeland Security and Governmental Affairs Committee 290f30 
82 

would return them to financial viability. The President's direction was to manage the 

government's investments on behalf of taxpayers in aeommercial manner. In that 

context, the team focused on ensuring that the companies developed plans that would 

achieve financial viability while not interfering in day-to-day management of the 

companies. The actions that both the prior and current Administrations took to stand 

behind the American auto industry helped save more than a million American jobs during 

a period of economic crisis and support a broader recovery in the auto industry and across 

our manufacturing base. 

V. Relations with Congress 

57. Do you agree without reservation to respond to any reasonable request or summons to 

appear and testify before any duly constituted committee of the Congress, if confirmed? 

Yes. 

58. Do you agree without reservation to reply to any reasonable request for information from 

any duly constituted committee of the Congress, if confirmed? 

Yes. 

VI. Assistance 

59. Are these answers your own? Have you consulted with OMB or any other interested 

parties? If so, please indicate which entities. 

These answers are my own. I consulted with staff from OMB and other parts of the 

Administration. 

, hereby state that I have read the foregoing Pre-hearing 

Questions and that the information provided therein is, to the best of my knowledge, current, 

~'bL This 1"ii day of ~1~ , 2013 

Senate Homeland Security and Governmental Affairs Committee 300f30 
83 

U.S. Senate Committee on Homeland Security and Governmental Affairs 

Additional Pre-hearing questionnaire from Ranking Member, Tom Coburn 

for the nomination of Brian Deese to be Deputy Director, 

Office of Management and Budget 

I. During his campaign, President Obama promised to conduct "an immediate and periodic 

public inventory of administrative offices and functions and require agency leaders to 

work together to foot out redundancy." Please elaborate on the administration's current 

efforts to implement this plan. Also, if confirmed, please describe your role in this effort 

and list any areas in which you plan to focus. 

My understanding is that the Administration is taking significant steps to root out 

redundancy and duplication in Federal programs. In its most recent report on this subject, 

GAO found that the Executive Branch made progress on over 75 percent of its 

recommendations on reducing duplication and overlap, including in areas like food 

safety, veterans' homelessness, and financial literacy. To build on these efforts, the 2014 

budget proposes 215 cuts, consolidations, and savings proposals, which if enacted would 

save more than $25 billion. 

If confirmed, I look forward to leveraging the budget process to build upon this work and 

continually identify areas where programs can be streamlined and become more efficient. 

2. In a YouTube Video, "Open for Questions: The American Jobs Act," you asserted the 

President can take certain actions without congressional approval, including accelerating 

contractual payments to vendors and eliminating certain requirements for homeowners to 

refinance. I Please explain the other actions you believe the President can take without 

congressional approval in terms of the budget, including those regarding the 

implementation of the sequestration reductions. 

I believe that, particularly during a period of economic and fiscal challenges, it is 

important that we work closely with Congress and the private sector to identify pragmatic 

steps that could help improve goverrunent efficiency and provide greater incentives for 

private sector investment and job growth. For example, one area that members of 

Congress and businesses identified was the executive branch's capacity, within existing 

executive authority, to cut permitting times for high priority infrastructure projects. This 

is the kind of step that, if confirmed, I would look forward to pushing forward to make 

sure we are doing what we can to accelerate investment and job growth. 

Unfortunately, sequestration is a blunt instrument that is imposing harm to our economy 

that cannot be avoided without replacing sequestration with a more sensible deficit 

reduction package. If confirmed, I look forward to working with Congress to replace 

'Open for Questions: The American Jobs Act (Sept. 15,2011), http://www.youtubc.com/watch.?v=WgJ6cr5Ru54. 
84 

sequestration with such an approach that could help the economy in the short term and 

lock in more meaningful deficit reduction in the long term. 

3. Please explain whether you support the current policy of terminating White House tours 

as a means to achieve the necessary savings for sequestration. 

As with other agencies, the Secret Service has been forced to make hard choices as a 

result of sequester - my understanding is that in this case those choices were between 

eliminating the additional staff hours dedicated to providing security during White House 

tours or additional furloughs. 

While neither option is good, the Secret Service determined that doing all they could to 

avoid furloughs for the hard-working men and women of the Secret Service was the 

priority. 

4. Please explain whether Steven Rattner's book "Overhaul" is an accurate description of 

your involvement in decisions made during the bailout of the auto industry, including 

actions taken through the Presidential Task Force on the Auto Industry. Please also 

explain your involvement in the determination to keep GM's headquarters in Detroit. 

I was a member of the Administration team that reported to the National Economic 

Council Director and Treasury Secretary and provided the President with input on 

managing the crisis facing the American auto industry. At the end of 2008, amid the 

worst financial crisis since the Great Depression, credit markets were frozen and both 

GM and Chrysler faced the choice of seeking government support or being liquidated. 

The Administration at the time projected that such liquidations could result in the loss of 

more than one million American jobs. In this context, the prior Administration extended 

short-term bridge loans to GM and Chrysler. When President Obama took office he faced 

the choice of how to ultimately resolve the crisis. 

After considering options, the President decided to provide additional financial assistance 

to GM and Chrysler on the condition that both companies develop restructuring plans that 

would return them to financial viability. The President directed the team to manage the 

government's investments on behalf of taxpayers in a commercial manner. In that 

context, I worked-along with others-to help ensure that the companies developed 

plans that would achieve financial viability while not interfering in day-to-day 

management of their businesses. 

The Administration provided support to the auto industry several years ago, and the 

Administration team engaged with GM on a wide variety of issues that affected the 

company's potential financial viability. Nonetheless, I do recall that there were 

discussions about the issue of the location ofGM's corporate headquarters. It is my 

understanding that the decision, like dozens of others during that period, was ultimately 

lett to GM and I do not recall having any communications with GM officials about the 

issue. While difficult, the actions of both the prior and current Administrations helped 
85 

save more than a million American jobs and helped support a broader recovery in the 

auto industry and across our manufacturing base. 

5. In an October 2004 report you stated a goal for the United States should be the adoption 

of universal health care, which would lower the cost of health insurance and boost 

Americanjob creation. A recent study by the Society of Actuaries found the Patient 

Protection and Affordable Care Act (PPACA) will cause health insurance costs to 

increase in some markets as much as 80 percent. A number of other studies have 

confirmed significant premium increases? Further, Regal Cinemas just joined a growing 

group of employers cutting worker hours in order to avoid penalties built into the bill. In 

fact, one recent survey found requirements related to PPACA are now the biggest 

concem for small businesses, and 71 percent say the law makes it harder for them to hire 

more employees.} Roughly a third ofsmall businesses plan to reduce hiring as a result of 

the employer mandate, and a similar number say they will cut back hours to reduce the 

number of full time employees. Please explain how moving closer to universal 

healthcare as directed by PPACA will improve the U.S. business climate. Do you believe 

small businesses, as defined by PPACA, will be encouraged to offer health coverage to 

their employees because of the law, or incentivized to either drop coverage or not start 

offering coverage and send them to the exchange? If confirmed, how will this view 

affect your policy guidance and other job functions? 

The Affordable Care Act (ACA) was designed to help level the playing field for small 

businesses, while slowing the growth of health care costs, improving health care quality, 

and expanding access to affordable health care to millions of Americans. Historically, 

small businesses have paid 18 percent more than large businesses for the same coverage 

and have struggled to maintain health benefits for their workers. The ACA has already 

improved the affordability of insurance for small businesses through the medical loss 

ratio that requires insurance companies to provide a rebate to consumers if it spends less 

than 80 percent of premiums on medical care and quality: for 2011,3.3 million people 

insured through small businesses received an average rebate of$174. And a small 

employer tax credit has and will continue to help small business owners purchase 

coverage for their employees. The law also creates Health Insurance Marketplaces 

(Exchanges), where, starting next year, small businesses can pool their buying power to 

purchase affordable coverage. These reforms have the potential to make it easier to open 

a small business, help small employers purchase affordable coverage for their workers, 

and help lower premiums in the small group market. 

Since the enactment of the ACA, the Administration has sought to provide employers 

substantial flexibility as they prepare to implement the law. If confirmed, I will look for 

opportunities to continue providing appropriate flexibility to employers and will work to 

2 The Price ofObamacare's Broken Promises: Young Adults and Middle Class Families Set to Endure Higher 

Premiums and Unaffordable Coverage (March 2013), 

hltp:llencrg:ycommcrce.housc.1Jov/sitcs/rcl'ublicans.cnergycommercc.housc.gov/filcs/analysis/20l30311SPrcmiumRe 

!!Q.!1.lli!l.: 

3 U.S. Chamber of Commerce QI 2013 Small Business Survey, April 2013, 

http://www.uschambc.fsmallbusincssnation.com/commlulity/q 1-20 13-small-business-survcy. 
86 

address any unintended consequences of the law as we move forward with its 

implementation. 

6. In the same October 2004 report, you wrote investments should be made in research 

comparing "the relative value of one treatment versus another" - commonly referred to as 

"comparative effectiveness" research. PPACA created an institute to manage this kind of 

research, funded by a per-enrollee premium tax. How do you believe adding taxes to 

premium costs will affect the cost of health insurance for the average 

American? Nothing in the law limits the research findings from being applied to practice 

guidelines for doctors, or coverage and payments decisions for public health 

programs. In fact, the Secretary ofHHS may use the research in making coverage 

determinations in Medicare and Medicaid - and the cost of treatments is not barred from 

being considered either.' Do you believe government or private payors should refuse to 

pay for certain treatments if warranted by the outcome of comparative effectiveness 

research? 

The goal of comparative effectiveness research, also known as patient-centered outcomes 

research, is to provide patients and their doctors with high-quality, evidence-based 

research on which treatments work best. This research aids providers and patients in 

improving health outcomes by giving them the best available information to assist them 

in making health care decisions. The development of comparative effectiveness 

information is aimed at providing the most up-to-date, comprehensive information on 

what treatment is most likely to work for patients. This information is made available to 

health care providers and patients to create a knowledge base for their decision-making 

and is a powerful mechanism in providing high quality and safe clinical care. The law 

purposefully created an independent institute for this research and includes safeguards to 

assure patients that its goal is improving quality, not limiting access to, health 

care. With respect to Medicare, the Secretary uses a wide-array of scientific research to 

make coverage decisions. However, if the Secretary uses the findings of the independent 

research Institute created by the Affordable Care Act, she would be required to take the 

additional step of first conducting an iterative and transparent review, including a public 

comment period. With respect to Medicaid, States, not the Secretary, make coverage 

decisions subject to federal benefit requirements. 

7. The Medicare Trustees' report warned Medicare could be insolvent as soon as 2017, the 

year after President Obama leaves office. By the end of the decade, Medicare spending 

each year will cost taxpayers more than $1 trillion annually. How do you believe either 

of these facts should affect beneficiaries accessing care? 

I believe that addressing the issue of rising health care costs is one of the greatest long 

term fiscal challenges our nation faces. As part of a comprehensive deficit reduction 

agreement, I believe we should seek to do more to reform Medicare in ways that will 

'Warning; Side Effects. A Check-up on the federal heal law, 

hURP,"wW .coburn. SL'I1atc. gov/Rubliclindcx.cfm"u= r ilcs.Scrvc&Filc id-98bc I 143-1'556-469<1-9 J a[:4213946fcl2f 
87 

improve the quality of care and reduce costs while preserving the fundamental compact 

this program represents for seniors and people with disabilities. The President's FY2014 

Budget proposes roughly $370 billion in specified Medicare savings over 10 years which 

would encourage high-quality efficient care, recoup excessive payments to drug 

manufacturers, improve beneficiary incentives to consider the value of services they 

consume, and gradually phase in changes in beneficiary premiums and cost sharing .. 

These proposals are projected to extend the solvency of the Hospital Insurance Trust 

Fund by approximately four years. If confirmed, I look forward to working with 

Congress to strengthen Medicare in a way that avoids shifting significant risks onto 

individuals and preserves beneficiaries' access to care. 

8. According to the Congressional Budget Office's budget and economic outlook, federal 

debt will increase to more than $26 trillion by 2023. CBO also says federal outlays for 

the big three entitlement programs - Medicare, Medicaid, and Social Security - will 

account for almost half of all federal spending by 2023. Is it accurate to say that 

increased entitlement spending increasingly crowds out other important domestic 

priorities? If confirmed, how do you plan to address this issue? 

It is important that we take steps now to relieve the fiscal pressures caused by rising 

health care costs and demographic changes. The President's Budget lays out a set of 

entitlement reform proposals as part of a comprehensive approach to deficit reduction. 

These include over $400 billion in savings from government health programs, $200 

billion in cuts in other mandatory programs, and a switch to the chained-CPI for inflation 

indexing. Many of these reforms will result in even larger savings outside the ten-year 

budget window; for example, the health savings proposals alone will generate more than 

$1 trillion in deficit reduction in the second decade. 

9. For Medicare 402 demonstrations, OMB has an application requiring budget neutrality, 

but it is not required by statute. If confirmed, please explain how you plan to implement 

future demonstrations. 

Section 402 demonstration authority under the Social Security Act allows the Secretary to 

test whether methods of payment will increase the efficiency and economy of programs 

without adversely affecting quality. If confirmed, I will work with the Secretary to 

ensure demonstrations under this authority are consistent with statutory requirements. 

10. If confirmed, please explain the process you would use to enforce or not enforce budget 

neutrality in Medicaid 1115 waivers, as well as what data you would require from and 

verify for states. 

Section 1115 of the Social Security Act gives the Secretary of Health and Human 

Services authority to approve demonstration projects that promote the objectives of the 

Medicaid and CHIP programs. States have been able to use Section 1115 authority to 
88 

ex,pand eligibility, provide additional services, and create new service delivery and 

payment models that improve care, increase efficiency, and reduce costs. 

The budgetary impacts of demonstration requests must be carefully evaluated To help 

States seeking approval for an 1115 demonstration request, HHS released a template for 

states to use in order to simplify the demonstration application processes and make it 

easier for states to design and gain approval for demonstrations, including required 

financial data elements to determine budget neutrality. If confirmed, I look forward to 

working with HHS to continue the work they've undertaken to ensure that the budgetary 

impacts of state requests are carefully evaluated. 

11. CRO has stated that increasing health care spending is a challenge for our country. What 

pIovisions ofPPACA do you think hold the most promise for restraining costs and why? 

What else needs to be done? 

The Affordable Care Act (ACA) included a nnmber of provisions that have the potential 

to fundamentally transform our health system into one that delivers better care at lower 

cost. Using authorities in the ACA, CMS is taking steps to address targeted areas in 

which payments exceed the cost of high-quality and efficient care, which include 

expansion of competitive bidding for durable medical equipment. The ACA included 

provisions that link payment to performance on quality and efficiency metrics and 

encourage providers to coordinate services, such as the Medicare Hospital Value-Based 

Purchasing Program, the Hospital Readmissions Reduction Program, and the Medicare 

Shared Savings Program for Accountable Care Organizations. These provisions 

encourage providers to seek out and use new technology and health care delivery best 

practices that can help them improve the quality and efficiency of care, such as electronic 

medical records. 

In addition, the ACA created the Innovation Center, which enables CMS to develop and 

test new payment and delivery system models in both Medicare and Medicaid that will 

help determine the best ways to improve care and lower costs. The Administration has 

identified additional opportunities further reduce costs as identified in the President's 

Budget, and if confirmed, I look forward to working with Congress on both ACA 

implementation and future legislation to strengthen health care delivery. 
89 
90 

Æ 

Jonathan E. Rackoff 

Assistant General Counsel and 

Designated Agency Ethics Official 

Office of Management and Budget 

725 17th Street, NW, Room 5001 

Washington, DC 20503 

Re: Ethics Agreement 

Dear Mr. Rackoff: 

March 22,2013 

The purpose of this letter is to describe the steps that I will take to avoid any actual or 

apparent conflict of interest in the event that I am confirmed for the position of Deputy Director, 

Office of Management and Budget. 

As required by 18 U.S.C. § 208{a), I will not participate personally and substantially in 

any particular matter that has a direct and predictable effect on my financial interests or those of 

any person whose interests are imputed to me, unless I first obtain a written waiver, pursuant to 

18 U.s.C. § 208(b)(1). or qualify for a regulatory exemption, pursuant to 1-8 U.s.C. § 208(b){2). 

I understand that the interests of the following persons are imputed to me: any spouse or minor 

child of mine; any general partner of a partnership in which I am a limited or general partner; any 

organization in which I serve as e>fficer, director, trustee, general partner or emple>yee; and any 

person e>r organization with which I am negotiating or have an arrangement concerning 

prospective employment. 

I understand that as an appointee I must continue to abide by the Ethics Pledge (Exec. 

Order No. 13490) that I previously signed and that I will be bound by the requirements and 

restrictions therein in addition to the commitments I have made in this and any other ethics 

agreement 

I have been advised that this ethics agreement will be posted publicly, consistent with 

5 U.S.C. § 552, on the website of the U.S. Offiee of Government Ethics with other ethics 

agreements of Presidential nominees who file public financial disclosure reports.